Companies like Circle and BitGo are reportedly preparing to apply for banking licenses or similar regulatory approvals in an effort to move closer to the heart of traditional finance, according to The Wall Street Journal.<\/p>\n
This marks a notable shift in strategy for the digital asset industry, which has long operated on the fringes of regulated banking. But after the collapse of FTX in late 2022, followed by the shutdown of crypto-friendly banks like Silvergate and Signature, the distance between crypto and conventional finance became a liability. With few banking partners left and increasing regulatory scrutiny, firms have struggled to operate smoothly in the U.S.<\/p>\n
Now, players like Circle\u2014known for its USDC stablecoin\u2014and digital custodian BitGo are working to change that narrative. By obtaining federal licenses, they aim to legitimize their business models, gain more trust from regulators and institutions, and regain access to core financial infrastructure.<\/p>\n