Writer: Lucy Lazarony
Editor: Lillian Guevara-Castro
Reviewer: Adam West
Key Takeaways
- Financial technology companies and crypto firms are pursuing bank charters as an inexpensive form of financing and as a means to grow their businesses.
- New applications for bank charters are on the rise during President Trump’s second term.
- The impact on the subprime lending market is yet to be determined as companies with new banking charters decide on their plans for lending.
Banks have them and financial technology and crypto firms want them. Bank charters are in demand because they offer a cheap source of financing for the companies gaining them.
Another reason companies pursue banking charters is to gain access to capital to help grow their businesses. This was the reason fintech SoFi became a national bank in January 2022, Bloomberg reports.
Varo, Lending Club and Revolut are among the other fintech companies that are now banks, and Paypal is in the process of becoming a bank, according to Semafor.
Laser Digital is seeking a U.S. banking charter and Circle, Ripple, Bitgo and Paxos are among the companies that have conditional approval from the Office of the Comptroller of the Currency for their bank charters, according to The Block.
Bank Charter Applications On Rise
New applications for bank charters are on the rise during the second Trump administration. In the first eight months of 2025, the number of bank charter applications more than doubled to 21 from eight bank charter applications in all of 2024, according to the Klaros Group.
“The current administration came in, they immediately became very, very pro crypto, which we had not seen ever in the United States, opening the door, not just within the White House, but also with all the federal agencies related to finance and banking,” said Patrick Gerhart, President of Telcoin Digital Asset Bank.
Indeed, then-candidate Trump promised to make the United States the “crypto capital of the world” from the campaign trail.
Impact of the GENIUS Act
Congress played a role as well passing the GENIUS Act legislation that creates a federal regulatory system for stablecoins. President Trump signed the legislation into law in July.
“Congress really kind of just took the ball and ran with it, which I think really opened a lot of bankers’ eyes in the United States in regards to, this is actually happening now. We’re actually going to be dealing with this in the industry,” Gerhart said.
Fintechs Have the Scale to Manage Bank Charters
Many fintechs are large enough to successfully manage a banking charter.
“You have a lot of fintechs that have scaled,” said Rouzbeh Rotabi, Chief Operating Officer with Qolo. “When you get to billions and billions and hundreds of billions of dollars in volume, and you can own the bank experience and you can save anywhere from 7 to 30 basis points, that starts adding up to a significant amount of money.”
These fintech companies also will be able to cut back on working with third parties once they gain a banking charter.
“They don’t have to go to a third-party bank. They don’t have to go to their processor. They can tell the bank what to build because it’s in house,” Rotabi said.
Bank Charter Leads to New Marketing Options
Another advantage to getting a bank charter is increasing the speed in which products are launched, Gerhart said.
A bank charter also leads to new marketing opportunities.
“But when you have the bank charter and you have the marketing tools, you can blend them well together to either upsell products to cross sell different products,” Rotabi said.
Impact on Subprime Lending
The effect bank charters will have on the subprime lending market is yet to be determined.
“So the way I’m kind of looking at it right now is that you will be able to utilize the blockchain, your tokens, stablecoins … to get loans, to utilize those for loans versus doing a traditional loan through a bank,” Gerhart explained.
“Again, we’re still trying to figure a lot of the intricacies out. I don’t think anybody’s really there on the lending side.”
So any future impact on the subprime lending market and for subprime customers looking for new lending opportunities may have to wait until the companies with new bank charters decide on their plans for lending.
The Bottom Line
Fintech companies and crypto firms are seeking banking charters in record numbers in the second term of the Trump presidency. The GENIUS Act, which passed this summer and creates a federal regulatory system for stablecoins, is one reason crypto firms are pursuing bank charters.
How this impacts subprime lending is as yet undetermined as fintech companies and crypto firms still need to wind their way through the bank charter approval process. Once they do, they can better establish their lending options with their new bank charters.
