The second term of President Donald Trump is driving significant changes in the financial sector, as cryptocurrency firms and traditional banks move closer together. Crypto companies such as Circle, BitGo, Coinbase, and Paxos are now considering applying for U.S. banking licenses, according to a recent report from The Wall Street Journal. At the same time, some of the country’s largest banks are preparing to enter the digital asset space by developing stablecoins.
This shift comes as the Trump administration removes key restrictions on both the banking industry and crypto operations. The convergence is seen as a result of the federal government’s more lenient stance, opening the door for greater collaboration and integration between traditional and digital financial players.
A spokesperson from Coinbase confirmed to Yahoo Finance that the company is “actively considering” applying for a banking license but has not yet made a final decision.
Meanwhile, Bank of America, the country’s second-largest lender, has expressed interest in creating its own stablecoin—a type of cryptocurrency pegged to assets like the U.S. dollar. CEO Brian Moynihan stated in February that if new legislation allows for stablecoin issuance, the bank will move into that space.
Other major players are also exploring opportunities. Institutions such as Standard Chartered, PayPal, Stripe, and Fidelity Investments are either testing or considering stablecoin products. Fidelity, a major asset management firm, has already begun experimenting with its own stablecoin, according to a report by the Financial Times.
Mike Belshe, CEO of crypto firm BitGo, told Yahoo Finance that both industries are gradually integrating. “Some of the traditional banks, they’re going to embrace and start offering crypto-related products directly,” he said. “We’re also going to see crypto moving more towards traditional finance as well, which is crypto companies like BitGo offering more traditional services.”
A major regulatory change helping fuel this transformation came last week when the Federal Reserve withdrew previous guidance that warned banks against involvement in cryptocurrency activities. As a result, banks are no longer required to get prior approval from the Fed before engaging in crypto-related operations.
The Trump administration is also pushing for Congress to pass a new legal framework governing stablecoins. This could be another reason crypto firms are now pursuing bank licenses. Under proposed legislation, stablecoin issuers would likely need to hold a federal or state charter or similar form of official approval.
Despite the trend, not all firms are aiming to become banks. In a statement to Yahoo Finance, a spokesperson from Circle clarified that the company does not plan to become a bank or insured depository institution. However, it does intend to follow any new U.S. rules related to payment stablecoins, which could require federal or state trust licenses or similar permissions.
As the boundaries between traditional finance and cryptocurrency continue to blur, the financial landscape is undergoing a rapid transformation. The Trump administration’s deregulatory approach is encouraging this fusion, making it one of the defining financial trends of the current political era.
Related Topics:
Egypt’s Finance Minister Highlights Commitment to Business Growth
