Financial technology and cryptographic companies are requesting state or national banking letters, with the aim of expanding their business under the most friendly Trump administration with cryptomonitres as industry executives report a remarkable increase in the discussions and applications of the letter, reports Reuters.
“We have seen much more interest. We are working on several applications now,” Alexandra Steinberg Barge, a member of the troutman Pepper Locke law firm. However, companies are being “cautiously optimistic” as changes in the leadership of the regulatory agency develop.
Becoming a bank brings more strict regulatory supervision, but can reduce loan costs and improve legitimacy. Banking letters allow companies to reduce their cost of capital by accepting deposits, however, accessing these is an important dispute point in the cryptographic community.
Several cryptocurrencies have resisted, over time, become banks on regulatory supervision associated with movement, instead following the ethos of the industry to decentralize and further improve access to financial services to non -banked or non -banking individuals.
The cryptocurrency companies, including paxos, Anchorage and Protecto, have become regulated to the ‘banks’ regulated by the federal government after ensuring a federal trust letter through the US Office of the Comptroller of the Currency (Occ). Kraken and Avanti have secured pictures of special purpose deposit institutions in Wyoming, making them cryptographic banks regulated by the State.
Historically, the new bank cards have been rare. Between 2010 and 2023, regulators approved an average of only five per year, compared to 144 per year from 2000 to 2007, according to S&P global.
Applications decreased due to low interest rates, profitability concerns and regulatory obstacles. The Federal Deposit Insurance Corporation (FDIC) and Federal Reserve officials have indicated support to optimize the process. However, establishing a new bank is still expensive, with costs ranging from $ 20 million to $ 50 million, according to the report.
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