NEW YORK (Reuters) – According to more than a half-dozen industry executives, financial technology and cryptocurrency businesses are trying to become state or national banks in order to expand their operations under the Trump administration, which they regard as more industry-friendly.
Firms looking to develop and acquire consumer credibility see an opportunity under US President Donald Trump to get licenses that authorities have previously been delayed or reluctant to authorize.
“We’ve seen a lot of interest. “We are currently working on several applications,” said Alexandra Steinberg Barrage, a partner at the legal firm Troutman Pepper Locke. “Is it in full swing yet? I do not think so. Our clients are cautiously hopeful, waiting for things to settle,” as the administration appoints heads of banking agencies.
Two additional people who are working on possible applications say that discussions and preparations for bank charters have expanded dramatically. It remains to be seen how many businesses will comply, they said.
While becoming a bank requires extra regulatory inspections, the cost of capital and operating company can sometimes be reduced. A license can also boost the firm’s credibility in the eyes of clients, allowing it to expand its business and market potential.
This will also allow enterprises to cut their borrowing rates by drawing on deposits, which is a significant advantage, according to Carleton Goss, a partner at law firm Hunton Andrews Kurth who is working on three such applications.
According to industry experts and analysts, new banks will increase industry competition while also catering to certain consumer groups or geographies.
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