Crypto, startups and banking make a scary mix

THE next must-have accessory for crypto and tech bros looks to be far less sexy than a Lamborghini – it’s a banking licence. Getting approved is typically time-consuming, bureaucratic and dull, but these budding lenders are likely to find themselves pushing on an open door – and that poses dangers.

Stablecoin issuer Circle Internet Group and tech billionaire Peter Thiel are among the names linked with trust bank charter applications in recent days. The backdrop to this is a White House pushing for regulators to help with innovation and growth in the economy and finance. Some of that is down to the backing Donald Trump got from Silicon Valley billionaires and crypto moguls in last year’s presidential race, plus his personal financial interests in memecoins and digital assets.

But it is also down to frustrations with a long drought in new bank formations since the financial crisis of 2008. Before that, many years had seen 100 to 200 new banks each, according to the Federal Deposit Insurance. Since then, most years have barely seen 10 or 15 lenders open for business. Ultra-low rates have made simple banking less profitable, but campaigners for small banks also blame heavy-handed regulation and tough capital rules.