Ripple, Circle and BitGo Expands into US Banking Sector Amid Trump Era Regulations

The cryptocurrency sector is undergoing a significant transformation, marked by an increasing integration with the traditional US banking system.

Notably, propelled by a favorable regulatory environment fostered during the Trump administration, several prominent cryptocurrency firms are strategically positioning themselves to offer a broader range of financial services within the established banking framework.

Moreover, firms such as Ripple, Circle, and BitGo have taken concrete steps toward deeper integration by submitting applications for a national trust bank charter.

Circle and Other Crypto Firms Seek Traditional Finance Integration

This charter, granted by the Office of the Comptroller of the Currency (OCC), would confer the authority to provide cryptocurrency custody and payment processing services on a national scale, circumventing the complexities and costs associated with securing individual state licenses.

The appeal of a national trust bank charter lies in its ability to streamline operations, reduce regulatory burdens, and facilitate broader access to the traditional financial system. However, it’s crucial to note that these charters typically restrict institutions from offering loans or accepting direct deposits from customers.

Circle’s application to establish the “First National Digital Currency Bank” exemplifies this trend. This initiative will enhance the infrastructure supporting the USDC stablecoin, a digital asset pegged to the US dollar, and align with evolving regulatory requirements, particularly those outlined in proposed legislation like the GENIUS Act.

Similarly, Ripple has applied for a Federal Reserve master account, a move that would enable the company to hold reserves for its stablecoin offerings directly. These actions demonstrate a concerted effort by these firms to solidify their position within the traditional financial ecosystem and gain direct access to critical financial infrastructure.

Rapid Adoption of Traditional Finance

Kraken, another significant player in the cryptocurrency exchange market, is pursuing a different strategy. Rather than seeking a full banking license, Kraken intends to integrate crypto-related tools with conventional financial services.

This approach is evidenced by its plans to launch debit and credit cards, providing users with seamless access to their cryptocurrency holdings for everyday transactions. According to Kraken co-CEO Arjun Sethi, this expansion represents a “natural convergence” between the crypto space and traditional finance.

The trend of crypto companies seeking integration with the traditional banking sector reflects a significant departure from the industry’s early ethos. As Max Bonici, a partner at Davis Wright Tremaine, observed, “It’s a 180 from where a lot of these crypto companies started, saying, ‘We don’t need banks, we don’t need laws, we’re above it all.'”