Coinbase transforms into a crypto bank! Considering applying for a US banking license, the new stablecoin bill is being promoted simultaneously

The well-known exchange Coinbase is considering applying for a U.S. federal bank license, with hopes of transforming into a bank. On the other hand, the U.S. Congress is also promoting two stablecoin bills, attempting to improve the regulatory system.

Coinbase considers transforming into a bank, plans to obtain a license to attract deposits and provide loans

Coinbase states that it is currently "actively considering" applying for a U.S. federal bank license, but has not yet made a formal decision. This news echoes recent rumors that multiple crypto companies, including Circle, Paxos, and BitGo, also have similar "transformation" plans.

• With a bank license, crypto companies can "attract deposits and provide loans" like traditional banks.

• However, they will also be subject to federal financial regulations and reporting requirements.

For example, Anchorage Digital, a digital asset bank that already has a bank license, is being investigated by the U.S. Department of Homeland Security's Financial Crimes Investigation Unit, indicating that the transformation path remains bumpy.

(U.S. Department of Homeland Security's Financial Crimes Unit investigates Anchorage Digital, potentially facing compliance issues)

Paxos obtained initial approval as early as 2021, Circle also follows

In fact:

• As early as 2021, the U.S. Office of the Comptroller of the Currency (OCC) initially approved Paxos's bank license application.

• According to the Wall Street Journal, Circle also intends to apply for a U.S. federal bank license.

• With Federal Reserve Chairman Jerome Powell recently explicitly stating that "stablecoins need a legal framework," the overall atmosphere is moving towards being more open.

This shift in wind direction makes many crypto companies believe that "now is the best time to apply."

Bills on dual tracks in progress! Comparing STABLE and GENIUS bills

The U.S. Congress is currently promoting two stablecoin-related bills:

• Stablecoin STABLE Act (Transparency and Accountability)

• GENIUS Act (Promoting U.S. Stablecoin Innovation)

STABLE Act key points:

• Supported by the Republican Party, advocating for strengthened federal regulation.

• Requires separation of stablecoin reserves and operating funds.

• Prohibits using "self-issued digital assets" as collateral for stablecoin issuance, with a two-year ban.

GENIUS Act key points:

• Takes a more flexible approach, balancing federal and state-level management.

• Defines stablecoin issuers as "financial institutions".

• Strengthens anti-money laundering (AML), liquidity, and sanctions review.

• One of the goals is to strengthen the U.S. dollar's dominance in the global payment system.

Currently, both bills are still in the legislative process. STABLE has just passed the House Financial Services Committee, while GENIUS was passed by the Senate Banking Committee in mid-March.

Additional financing channels for institutions and businesses, with another deposit attraction window

If crypto banks can accept crypto assets as collateral, they can:

• Provide "crypto asset financing" for Web3, startups, and even traditional enterprises
• Cross-border lending without going through the SWIFT system, potentially faster and cheaper
• By combining stablecoins (such as USDC), it would create a "parallel banking system for the U.S. dollar"

In the long run, this will be an important turning point in promoting crypto market stability and compliance. However, cryptocurrencies are, to some extent, a challenge to traditional banking operations, designed for "decentralization". Perhaps this does not mean abandoning the crypto ideal, but choosing to legally and compliantly enter the core financial system and rewrite the rules from within.