Legal Experts Say Shifting Federal Stance on Digital Assets Puts Bank Charters Back in Play

For years, getting a bank charter was something only traditional financial institutions worried about.

That’s changing fast.

A growing number of FinTech companies now see charters as powerful tools that can shape how they build their businesses, manage compliance and compete in the market.

The shift is being driven by the collision of three forces, including the rise of digital assets; the growth of payment stablecoins; and a regulatory environment that’s rapidly being rewritten.

Regulatory developments have changed the math for companies that straddle the line between technology and financial services, two partners at the law firm Nixon Peabody told Competition Policy International, a PYMNTS company.

Momentum is tilting toward “allowing banks to provide core banking services in the digital assets area,” Gregory N. Blase said.

Regulators are becoming increasingly comfortable with the idea of digital asset activities taking place inside the walls of regulated banks, not just outside them.

For FinTech leaders, that comfort level has real, immediate consequences. The question of whether to pursue a charter is no longer just about gaining the ability to take deposits or make loans. It’s now closely tied to how companies plan to issue stablecoins, hold digital assets on behalf of customers, and meet the compliance standards that federal lawmakers are writing into law.

“The national charter provides a lot of operational efficiencies, so that you essentially get to play by a uniform set of rules and gain access to a national scale rather than having to comply with really what is a patchwork of lots of different state regulations,” Andrew C. Glass said.

That focus on a single, consistent rulebook addresses a problem for FinTech companies. Many have spent years navigating a tangled web of state-by-state licensing requirements, each with its own rules, timelines and expectations.

However, streamlined operations are only part of the picture.

Glass said that “a national trust bank charter is really becoming a market differentiator,” particularly when business partners evaluate how well a company manages its reserves, handles customer redemptions and maintains compliance standards. In a market where digital assets still draw heavy scrutiny, being supervised by a respected federal regulator increasingly influences who gets to do business with whom and how much volume flows through a given platform.

What the GENIUS Act Means for Charter Strategy

The passage of the GENIUS Act has tightened the link between charter decisions and stablecoin business plans.

Blase described the statute’s core intent, observing that “the law really seeks to onshore the payment stablecoin issuance and bring transactions that are conducted using payment stablecoins under federal regulation.”

In other words, the law is designed to bring stablecoin activity onto United States soil and under U.S. rules, treating stablecoins not just as a technology product but as a regulated financial instrument subject to anti-money laundering and financial crime laws.

The law also creates a two-tier structure that directly affects how companies think about charters. Larger stablecoin issuers will be required to operate through subsidiaries licensed by the Office of the Comptroller of the Currency (OCC), the federal agency that oversees national banks. Smaller issuers can choose to operate under state-level approval instead. That split has pushed questions about company size, regulatory relationships and long-term positioning to the top of the strategic agenda.

Just as important is a provision in the GENIUS Act that prohibits stablecoin issuers from passing along investment returns to consumers.

“The law is clear that the issuer of the stablecoin is not permitted to provide the yield that they receive on the reserves to the consumer,” Blase said.

Across the broader industry, however, a lively debate continues over whether affiliated companies or service providers might be able to offer consumers yield-like rewards or incentives without technically breaking the law.

Those debates go beyond legal fine print. They raise core banking questions about how consumers might treat stablecoins, specifically, whether people would start using them the way they use bank deposits.

“The OCC at some point may be called upon to consider whether those yield-like offerings create functional deposit substitutes,” Blase said, highlighting the tension between encouraging innovation and maintaining the safety and stability of the financial system.

States Are Serving as Testing Grounds

While federal law sets the big-picture framework, individual states continue to play a role in how companies plan and build their operations.

“There are really opportunities for businesses to use the states … to experiment with how to develop policies and procedures and to operationalize those,” Glass said.

States like Wyoming and Nebraska have moved early to create rules for digital asset companies. Wyoming has gone so far as to develop its own state-issued stablecoin model, building infrastructure designed to support blockchain-based payments across multiple networks. Nebraska has taken a narrower approach, creating a framework that Glass characterized as “a smaller analog to what becoming chartered under the GENIUS Act will look like.”

These state programs function as real-world testing environments. Companies can develop and refine their anti-money laundering controls, their processes for holding customer assets and their methods for managing reserves, all under the watch of state regulators.

Bigger states bring different challenges. New York’s BitLicense framework, long considered one of the toughest state-level regulatory programs in the country, continues to set the bar for compliance expectations among companies operating at scale. California’s emerging digital asset legislation signals a similar push toward tighter oversight.

These larger regimes allow firms to experience “what it’s like to be operating at a national scale,” particularly when it comes to disclosure requirements and risk management practices, Glass said.

However, state-level experimentation exists alongside unanswered questions about which rules take priority when federal and state laws conflict. State regimes are going to face some preemption issues, underscoring just how fluid regulation remains in digital finance, Glass said.

Compliance Is No Longer Optional; It’s the Price of Entry

Across the federal and state landscapes, strong internal controls and risk management sit at the center of everything. Regulators continue to demand rigorous risk management practices, particularly when it comes to preventing financial crimes, Glass said.

The demands carry real structural consequences for FinTech companies that may have built their compliance programs for a lighter-touch regulatory world, not for the level of examination that comes with being a bank. Privacy protections, proof of adequate financial reserves and independently audited financial statements are increasingly becoming baseline expectations in any regulatory conversation.

The transition is part of something bigger than any single company’s compliance upgrade, Blase said. Regulatory developments aim to construct “the legal scaffolding on which the next payment system can function.”

Despite progress in legislation and regulatory guidance, the rules of the road aren’t final.

“The dust is yet to settle on the nature of the contours of the regulatory landscape,” Blase said.

For FinTech executives, that means the window for strategic positioning is open, but so is the window for uncertainty. The companies that move thoughtfully now, building compliance infrastructure, choosing the right charter path and preparing for federal oversight, will be best positioned when the dust does finally settle.

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