As the cryptocurrency industry grows and becomes more prominent, access to banking services in the US is becoming increasingly uncertain. While there is no formal ban, financial firms are imposing long application processes and often turning away smaller crypto companies, hindering their ability to operate. Recent events, such as the closure of crypto-friendly Silvergate Capital Corp., and the seizure of Signature Bank by regulators, have only stoked the fears of banks to provide services to the crypto industry.
Cross River Bank, based in Fort Lee, New Jersey, has allegedly only accepted a few crypto companies, such as stablecoin issuer Circle Internet Financial Ltd. This contrasts with its response to non-crypto customers, who were wholly shut out by the bank. JPMorgan Chase and the Bank of New York Mellon have somewhat agreed to do business with select crypto firms, but the application process is reportedly “quite lengthy,” possibly taking up to six months.
Crypto companies are consequently restricted in how they can handle their businesses, as they are unable to access reliable banking services. This overregulation of the industry is becoming a more pressing issue, with calls for greater regulatory clarity and support so that the industry can continue to provide its services to US customers. Coinbase has taken several initiatives in this regard, including asking for a well-defined regulatory framework that promotes the growth of cryptocurrency in the US.
Sophie Young
- 2023-03-30
Access to Banking for Crypto Companies Limited by US Regulations
US banks are imposing lengthy and often cumbersome application processes, often turning away smaller crypto companies, hampering their ability to operate in the US. Coinbase is leading the regulation battle to define a regulatory framework that will promote growth of the industry.
