Circle, Coinbase and Bitgo are preparing to ask for a banking license – this is why it could be a problem

Exchange platforms want to become full -fledged banks

In 2024, a striking trend was the adoption of Bitcoin by traditional institutions, especially through the launch of Bitcoin Spot ETF. Although these products do not allow their holders to take full advantage of the properties of the BTC, they offer an exhibition at its price and help to increase the liquidity of the market.

In 2025, one could attend an opposite movement: not institutions that turn away from bitcoin, but companies in the cryptocurrency industry which, in turn, approach the traditional banking system thanks, or because, depending on the point of view, of increasing regulatory supervision.

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The Wall Street Journal reveals today that Several “crypto” companies have started steps to obtain a banking license. Among them are:

• Cornerbaseone of the largest exchange platforms in the world;
• Bitgoa company specializing in digital asset custody;
• Circlethe emitter of the stablecoin USDC;
• Paxosthe transmitter of stablecoin backed by gold, the Paxos Gold (Paxg).

If these licenses were granted in 2025, this year would mark a decisive turning point: that of The institutionalization of the cryptocurrency market.

In this context, the United States Senate examines the Genius Act, a bill intended to supervise stablecoins. The text provides compulsory reservations in 1: 1, prohibits algorithmic stablecoins and requires total transparency. Emitters managing more than $ 10 billion in assets would be directly supervised by the Federal Reserve (Fed).

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Behind banking licenses, risks for the cryptocurrency industry

Although these announcements can be perceived by many as a positive advance for the sector, they nevertheless raise significant risks, in particular with regard to the neutrality of certain blockchains and the integrity of user funds.

First of all, obtaining a banking license would open up the possibility for these companies to practice the fractional reserve With their customers' fiduciary currency deposits.

Even if the constitution of fractional reserves for stablecoins or assets in cryptocurrencies is currently not authorized, such a change in status would deeply transform companies born in Bitcoin spirit and decentralization.

They would then become actresses fully integrated into traditional finance, moving away from their initial mission: to offer an independent monetary alternative.

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In addition, submitting exchange platforms to banking regulations would contribute to trivialize the systematic observation of on-chain activitiescalling into question the pseudonymat.

Finally, such an evolution would consolidate the dominant position of the companies concerned. Neophyte investors, in search of security, would naturally be inclined to turn to actors with a banking license, to the detriment of smaller exchanges, unable to fulfill these criteria. This could strengthen a monopoly and stifle innovation in the crypto ecosystem.

Source: Wall Street Journal

First attracted by the bait of gain, I am now trapped Deep the Rabbit Hole. Without a way out, I just have to share my knowledge and transmit the passion I have for Bitcoin. I am also the creator of Adopt A Block, an educational site dedicated to Bitcoin.

Marius Farashi Tasooji

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