According to a report by the Wall Street Journal, four major cryptocurrency companies are planning to apply for bank licenses or similar permissions to integrate cryptocurrency assets into the traditional financial system. The report indicates that these companies are taking strategic steps to achieve the capability of providing deposit services and conducting loan transactions.
Crypto and Banks
The report reveals that US-based firms Circle and BitGo have applied for federal bank approvals. These companies aim to offer deposit-taking and lending services to conduct traditional banking operations. Similarly, it is reported that Coinbase and Paxos are also considering similar steps.
The increasing optimism regarding regulations since Trump’s administration has encouraged these companies.
Regulatory Reviews and Compliance Processes
Currently, Anchorage Digital stands out as the only cryptocurrency company with a federal bank license. In 2022, the OCC requested improvements in customer oversight, anti-money laundering measures, and tracking suspicious transactions. Last week, the US Department of Homeland Security’s El Dorado Task Force reached out to learn about the company’s policies related to its employees.
While the reasons for the company’s scrutiny remain unclear, the industry’s efforts to comply with regulatory processes draw attention, although the journey is still rocky. Recent statements showcase the challenges faced during the integration of cryptocurrency with traditional financial institutions.
Officials from Anchorage Digital Bank expressed the difficulties encountered in the compliance process with federal regulations. They noted that this integration presents a complex structure for fulfilling the cryptocurrency sector’s regulatory and compliance requirements.
Anchorage CEO Nathan McCauley highlighted the challenges of this process, emphasizing the complexity of applying banks’ regulatory obligations directly to the cryptocurrency sector.
Anchorage CEO Nathan McCauley: “This process hasn’t been easy; integrating all regulatory and compliance obligations of banks into the cryptocurrency sector involves various challenges.”
It remains to be seen how these four major cryptocurrency companies will overcome this arduous process.
These developments signal efforts to establish a more solid foundation between digital asset markets and regulatory bodies and financial institutions. Improving compliance and oversight standards may help strengthen the overall structure of the sector.