US cryptocurrency companies are becoming more integrated with traditional finance by seeking banking licenses and preparing for potential stubcoin regulations. Circle and Bitgo are one of the companies working on applying for the US Bank Charter. Coinbase and Paxos are reportedly investigating similar procedures. These efforts come as Congress discusses new laws that impose stricter rules on Stablecoin issuers, aimed at regulating how these dollar-covered digital tokens are managed.
BITGO is applying for a complete banking charter. This allows you to provide services such as deposits and loans. The company is also involved in USD1, a stubcoin backed by World Liberty Financial, supported by members of the Trump family. BITGO is responsible for retaining the USD1 reserves. The circle is also increasing its lobbying activities. Particularly because large banks like Bank of America are trying to influence future laws in favor of traditional institutions over non-bank stubcoin issuers. Bank of America has expressed interest in launching its own stubcoin if regulations are permitted.
Two major bills are currently underway. The Republican-backed stable law passed the House Financial Services Committee, suggesting federal oversight for stable issuers, separating reserve funds from other corporate assets, and imposing a two-year ban on stable coins in certain algorithms. In the Senate, the Genius Act gains traction and calls for both federal and state regulatory frameworks, while also calling for anti-money laundering rules and liquidity standards. The bill requires that Stablecoin issuers be treated as financial institutions under the Bank Secrecy Act, report suspicious activity and verify clients.
These developments arise as the US government appears to be more open to crypto companies under President Trump’s administration. Previous restrictions on banks working with crypto companies have been eased. The Federal Reserve is expected to issue new guidance on crypto-related banking activities later this year. Federal Reserve Chairman Jerome Powell has expressed support for establishing clear legal guidelines for stubcoin, pointing to their growing use in the wider economy.
Anchorage Digital remains the only crypto company with a federal bank charter. It mainly caters to institutional clients and is involved in initiatives such as a $2 billion Bitcoin-assisted loan involving Cantor Fitzgerald and Copper. However, the company is also under investigation by the Department of Homeland Security.
Some traditional banks like the US Bancorp and Bank of America are some of the skeptical banks that develop crypto services through partnerships. International banks such as Deutsche Bank and Standard Chartered are closely watching developments as they consider entering the US crypto market.
Stablecoins, especially Tether and Circle USD coins, are essential to the crypto ecosystems widely used for payment and trading. As regulations progress, crypto companies are preparing to meet higher standards and gain deeper access to the financial system.