9 months ago

Companies Push for Bank Charters, Sparking Industry Debate

Companies Push for Bank Charters, Sparking Industry Debate
Why every company suddenly wants to become a bank · livemint.com

Imagine if companies like Amazon or your favorite video game maker wanted to start their own banks.

Right now, lots of different companies are asking the government for permission to do just that.

Some of these companies, especially those dealing with digital money like cryptocurrencies, want to become special kinds of banks called 'trust banks.'

These trust banks don't usually take regular money deposits or give out loans like your normal bank.

Instead, they hold onto important stuff for customers and charge a fee.

Banks that already exist are worried about this.

They say it's not fair because these new companies want to offer similar services without following all the same strict rules that big banks have to follow.

They worry it could make the whole money system less safe.

But the companies wanting to start these new services say they need these permissions to be clear about what they're doing and to work with other big companies.

They believe it will help make new kinds of money and services available to everyone.

Key facts

Applications for Trust Charters (This Year)
12
Period of Applications
More than any in the preceding eight years
Regulator for National Banks
Office of the Comptroller of the Currency (OCC)
Key Applicants Mentioned
Ripple, Coinbase, Wise, Sony Bank
Types of Charters Sought
National trust charters, industrial loan charters
Regulation on Stablecoin Issuers
The Genius Act tasks the OCC with approving and overseeing U.S. stablecoin issuers.

Quotes

Jonathan Gould

Comptroller of the Currency

“My view is that it’s better for it to be done within the banking system, if it’s legally permissible and can be done in a safe and sound manner”
livemint.com

Bank Policy Institute

A banking lobby group, in a letter to the Office of the Comptroller of the Currency

“could significantly increase risks to the U.S. financial system”
livemint.com

Faryar Shirzad

Coinbase’s chief policy officer

“the group was just trying to protect banks’ business interests”
livemint.com

Sources

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