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Payment service providers (PSPs), fintechs, and digital asset firms have traditionally scaled by obtaining money transmitter licenses (MTLs) across many US states, each with its own rules and oversight. That model is now being challenged. Recent approvals of national trust bank charters and specialized state banking charters offer nonbanks new ways to access the financial system. Nonbanks are now considering charter pathways that could enable national operations and potentially reduce or replace the need for state MTLs.
The bigger picture
State licensing allowed quick expansion, but created regulatory fragmentation. As firms have grown, juggling multiple state licenses has become costly and complex, with continued reliance on sponsor banks for payment infrastructure. Regulatory scrutiny of bank-fintech partnerships intensified in 2024, prompting firms to reconsider the long-term sustainability of the nonbank MTL model.
Some firms, such as SmartBiz Loans, have merged with nationally chartered banks to transform their business models. In March 2025, the Office of the Comptroller of the Currency (OCC) signaled support for fintech innovation and access to financial services with the conditional approval of SmartBiz’s application. Regulators remain open to new bank entrants and alternative models, including de novo and special-purpose charters.
In December 2025, the OCC approved several national trust bank charter applications for digital asset firms, illustrating how nonbanks are moving toward federal frameworks without becoming full-service banks. Momentum continues into 2026, with firms such as Mercury and Revolut applying for national trust bank charters. Eight digital asset-related applications are now pending, highlighting growing interest in federal charters.
The OCC, Federal Deposit Insurance Corporation (FDIC), and Federal Reserve are all enabling alternative charter pathways for fintech and digital asset firms to access deposit insurance and payment infrastructure, aiming to enhance oversight and financial system stability. Federal Reserve Governor Christopher Waller has emphasized the central bank’s role in this evolving landscape, noting that “we are well into a technology-driven revolution in payments, and the Federal Reserve intends to be an active part of that revolution.” Kraken Financial, operating under a Wyoming Special Purpose Depository Institution (SPDI) charter, recently gained direct access to the Federal Reserve payment system — a first for digital asset-focused institutions.
At the same time, the FDIC is reassessing how innovative institutions enter the banking system through state-chartered banks seeking federal deposit insurance. FDIC Acting Chairman Travis Hill recently stated that the agency is “reevaluating how we process deposit insurance applications from organizers proposing banks with new or innovative business models.”
The Utah Industrial Loan Company (ILC) charter allows firms to operate as FDIC-insured banks, access payment systems, and avoid multiple state licenses. PSPs such as PayPal are now evaluating ILC charters to operate within the regulated banking system instead of around it.
States are also developing specialized charters to support modern financial infrastructure. These frameworks allow firms to operate under banking supervision rather than the traditional multi-state MTL model. States such as Georgia, New York, Wyoming, and Nebraska have created specialized charters to support fintech and digital asset firms under banking supervision. These developments show regulators are expanding pathways for firms to access core financial infrastructure, making continued reliance on state MTLs less certain.
Why should you care?
For firms seeking national scale, these charters enhance regulatory credibility and provide national reach. A charter brings more control and consistent supervision.
These benefits come with trade-offs, including stricter governance, risk management, and compliance requirements. Regulatory obligations, especially consumer compliance, become the firm’s direct responsibility. Firms seeking charters must be ready for full compliance accountability.
As fintech and digital asset firms become chartered, they shift from being sponsor-bank clients to regulated competitors in deposits and payments, reshaping supervision and competition.
Next steps
Firms must assess whether their business model can operate within a banking regulatory framework, not just identify available charters.
- First, firms should match their activities with the appropriate charter structure.
- Second, conduct a regulatory readiness assessment for capital, governance, and risk management.
- Third, evaluate how a charter would affect operations, including new requirements such as capital planning and direct regulatory engagement.
- Finally, monitor evolving regulatory expectations and approval processes as more firms apply for charters.
Ultimately, pursuing a charter is both a regulatory and strategic decision. Firms must weigh whether to remain nonbanks or become regulated banks for long-term growth.
