Crypto’s New Face: How Stablecoin Firms Are Morphing into Banks to Survive
Regulation Drives Crypto Toward Traditional Finance as Circle, BitGo, and Kraken Embrace Bank-like Models
In a turn of events that may once have seemed unthinkable, crypto firms are no longer just trying to replace banks — they’re becoming them.
Driven by global regulatory shifts and the rising tide of stablecoin oversight, companies like Circle, BitGo, and Kraken are actively pursuing banking charters, entering a compliance-heavy world they were once created to circumvent.
Legislation Is Reshaping the Crypto Landscape
In the United States, lawmakers are pushing forward two major bills:
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The STABLE Act (Stablecoin Transparency and Accountability for a Better Ledger Economy)
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The GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins)
These bills would impose rigorous licensing, compliance, and reserve requirements on stablecoin issuers — effectively placing them under a framework that closely mirrors the traditional banking sector.
Europe is already there. Under the Markets in Crypto-Assets (MiCA) regulation, stablecoins face concrete oversight. Meanwhile, Hong Kong is proposing a similar regime, requiring stablecoin issuers to obtain a license from the Hong Kong Monetary Authority.
Amid this tightening environment, crypto players are adapting — fast.
Circle, Kraken, and BitGo Move Closer to the Banking Model
Circle, a leading stablecoin issuer, has denied becoming a bank, but is making moves that suggest otherwise. Its consistent publication of attestation reports, long before they were required under frameworks like MiCA, has already set a compliance-first tone.
Kraken, on the other hand, fully embraced the shift. In 2020, it became the first crypto exchange to receive a bank charter in Wyoming, through the state’s Special Purpose Depository Institution (SPDI) model. The charter enables Kraken to hold deposits, custody assets, and facilitate crypto transactions — the very functions performed by traditional banks.
BitGo, too, is preparing for a future shaped by bank-like regulation. Industry sources suggest the company is eyeing a full banking license as part of its strategy to stay competitive.
Experts Say the Shift Doesn’t Signal Defeat — But Evolution
Legal experts from the U.S., Europe, and Asia agree: the move toward banking licenses is more of an evolution than a surrender.
“Trust and access come with regulation.”
Joshua Chu, co-chair of the Hong Kong Web3 Association, noted that regulated banking status provides firms with public trust and access to infrastructure — such as fiat on-ramps — that pure crypto firms historically struggled to secure.
“Whether you like fiat or not, on-ramping and off-ramping are essential parts of this ecosystem.”
“Crypto once offered financial freedom — it still can.”
Charlyn Ho, U.S.-based legal counsel, recalled early projects using Bitcoin to help Afghan women access money independently. While she acknowledges that regulation may erode some of crypto’s original ideals, she sees the new framework as a pragmatic compromise.
“Getting a bank charter doesn’t mean giving up on crypto’s values, but it does mean working within existing structures.”
Banks Pivoting to Stablecoins as Well
According to Yuriy Brisov, a European legal advisor, banks were initially resistant to stablecoins — viewing them as threats. But now, several major European banks and even U.S. institutions like Bank of America are expressing interest in issuing their own stablecoins.
This trend reveals a broader truth: crypto and traditional finance are converging, not colliding.
Regulatory Clarity Will Define the Next Phase
Neither the GENIUS Act nor the STABLE Act has passed into law, but both are gaining traction in Washington. If enacted, they would usher in an era of federal or hybrid regulation for digital assets, depending on which path lawmakers take.
The endgame? A global financial system where stablecoin issuers are regulated like banks, and banks increasingly look like stablecoin issuers.
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