NEW YORK–Several large crypto firms said they are now exploring obtaining bank charters as rules on U.S. stablecoins are evolving and the Trump administration shows strong support for the industry.
Firms looking into also operating banks include Circle, BitGo, and Coinbase, according to the Wall Street Journal.
The Office of the Comptroller of the Currency gave preliminary conditional approval for a US bank charter to Paxos in 2021.
US Federal Reserve Chair Jerome Powell recently said that as digital assets gain mainstream adoption, establishing a legal framework for stablecoins is a “good idea.” Speaking at a recent event in Chicago, Powell recognized that after a “wave of failures and frauds,” the crypto space delivered a consumer use case that “could have wide appeal.”
As the CU Daily has reported, the House Financial Services Committee has passed a bill, the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, which seeks to provide a framework for stablecoins.
A companion bill, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, is moving in the Senate.
‘More Flexible Path’
While the STABLE Act emphasizes strict federal oversight, the GENIUS Act seeks a more flexible path that includes state and federal regulation, the Journal noted, further reporting:
- The STABLE Act enforces a two-year moratorium on issuing collateralized stablecoins backed by self-issued digital assets. It also mandates that stablecoin reserves be held separate from business funds to ensure that customer deposits are not used for operations.
- The GENIUS Act would establish a legal framework for stablecoin payments and aims to support US-based stablecoin issuers to reinforce the dollar’s global dominance. The bill also includes stricter rules, such as enhanced Anti-Money Laundering (AML) safeguards, reserve and liquidity standards, and sanctions checks.
Covered by BSA
Under the GENIUS Act, stablecoin issuers would be considered financial institutions covered by the Bank Secrecy Act and falling under strict AML rules. User verification and reporting of suspicious activity would also be required, the report added.
A bank charter potentially would allow crypto firms to operate like traditional lenders, taking deposits and making loans.
