Five Crypto Firms Get Coveted US Bank-Charter Nod
By Emily Mason and Katanga Johnson
Five cryptocurrency firms received preliminary approval to perform certain banking functions from a US regulator on Friday, marking the latest step in the White House‘s embrace of what was once viewed as a risky, fringe industry. The Office of the Comptroller of the Currency offered conditional approval for national trust bank charters that Circle Internet Group Inc., Ripple, BitGo Inc., Fidelity’s digital assets arm and Paxos had requested, according to a press release….In addition to granting charters, US bank regulators including the Federal Reserve and Federal Deposit Insurance Corp. are looking for other ways to welcome avant-garde firms into the financial system. For instance, the Fed is weighing whether to grant financial-technology firms access to payments systems like FedWire through so-called “skinny” master accounts. These developments do not just signal legitimacy for newcomers, but also a competitive risk for established lenders, said Karen Shaw Petrou, a longtime policy analyst and managing partner of Federal Financial Analytics. “The OCC is making it more than clear that the new light-touch regulatory construct is not all upside for traditional banks,” she said. “The OCC and FDIC, and perhaps even the Fed, will look far more kindly on nontraditional companies outside many rules that are allowed to offer services that compete directly with what I think must now be called legacy banks.”