Financial technology firms and cryptocurrency companies are actively pursuing bank charters under the new Trump administration, seeing an opportunity for expansion and legitimacy. These businesses aim to reduce borrowing costs, gain regulatory credibility, and increase their market presence by obtaining banking licenses, which were previously difficult to secure due to strict regulatory barriers. Law firms handling these applications confirm a rise in interest, with multiple firms working on securing charters. However, many applicants remain cautiously optimistic, waiting for the administration to finalize key banking regulatory appointments before fully committing to the process. While the regulatory scrutiny involved in becoming a bank remains extensive, obtaining a charter could lower operational costs and enhance trust among customers. Industry experts note that securing a banking license allows fintech and crypto firms to rely on deposits instead of costly external borrowing, making their operations more financially stable. Legal experts involved in these applications state that obtaining a charter could also provide companies with a competitive advantage in a crowded market by differentiating them from non-regulated entities. Additionally, the ability to operate under a banking framework could improve relationships with regulators and investors, helping to foster long-term growth. The renewed push for bank charters follows a sharp decline in approvals since the 2008 financial crisis, with only a handful of applications being granted annually. Industry analysts suggest that the previous administration’s regulatory stance made it difficult for fintechs and crypto firms to enter the banking sector, but there are now signs that this approach is shifting. Some experts believe that Trump’s administration will promote a pro-business regulatory environment, creating conditions for new banking institutions to emerge. Despite growing optimism, challenges remain. The application process for a banking charter is costly and time-consuming, often requiring up to $50 million in capital. Compliance with anti-money laundering laws and banking regulations also presents significant hurdles. Some legal professionals suggest that while Trump-appointed regulators may streamline approvals, the fundamental requirements for financial stability will remain strict. Following the collapse of fintech banking intermediary Synapse Financial Technologies, regulators have indicated plans to enhance oversight for banks working with fintech companies. This adds another layer of complexity to the application process, ensuring that new banking entrants adhere to stringent risk management and security measures. Trump’s regulatory appointees have expressed support for financial innovation, with statements suggesting they will encourage more firms to apply for charters. The acting chair of the Federal Deposit Insurance Corporation ( FDIC ) has stated that the agency will promote new banking applications to maintain a healthy balance of competition in the sector. Additionally, the Federal Reserve nominee for vice chair of supervision has emphasized the importance of accelerating the approval process for new financial institutions. Experts believe that while fintechs and crypto firms are eager to obtain charters, the banking sector will remain highly regulated to prevent financial instability. The process of securing a banking license remains complex, but firms that successfully navigate the requirements could gain a significant competitive edge. The current administration’s stance on deregulation may pave the way for more approvals, but it is unclear how quickly applications will be processed. The U.S. currently has over 4,500 banks, though consolidation among regional lenders is expected to reduce this number in the coming years. While some new entrants may receive charters, the overall banking landscape is likely to continue evolving, balancing innovation with regulatory oversight. Whether fintechs and crypto firms will be able to establish themselves as fully regulated banking institutions remains to be seen, but the current environment offers them the best opportunity in years to make their case. As financial companies push for banking charters, the industry is watching closely to see if the Trump administration’s approach will lead to a meaningful shift in approvals. With more firms showing interest, the future of banking could include a new wave of digital-first institutions, challenging traditional financial players while working within the regulatory framework.
