Licensed but Locked Out: Why Crypto Payment Firms Still Can’t Get Bank Accounts
Securing a crypto payment license from regulators is often touted as the key to legitimacy. But for many firms, a license does not automatically unlock the door to something just as critical: a bank account. Across major jurisdictions, crypto payment providers are discovering that regulatory approval and traditional banking access are two very different hurdles.
The disconnect stems from banks’ strict risk-management frameworks, which classify crypto-related businesses as high-risk regardless of their licensing status. Even with a license in hand, payment firms face lengthy onboarding processes, intrusive due diligence, and in many cases, outright rejection. Banks fear reputational damage, anti-money laundering (AML) exposure, and the volatility of the crypto sector—concerns that persist even when a firm operates under a regulated framework.
The Compliance Paradox
This creates a paradox: regulators expect crypto firms to have robust AML and know-your-customer (KYC) procedures, yet the banks that could provide the necessary infrastructure often refuse to serve them. Without banking access, payment firms struggle to hold fiat reserves, process settlements, or offer seamless on/off ramps. Some have resorted to using foreign banks or niche financial institutions, but these workarounds are costly and unsustainable.
The issue is not merely operational—it’s existential. A payment company without a bank account is like a car without fuel. It can’t move. Licensing was supposed to integrate crypto into the financial mainstream, but the banking gap keeps it on the periphery.
Banking Sector Hesitance
Banks have their own pressures. Post-2008 regulations, such as the Basel III framework, impose heavy capital requirements on high-risk exposures. Crypto, with its price swings and perceived illicit finance risks, falls squarely into that category. Additionally, many banks lack the technical expertise to assess crypto-specific risks, leading to blanket de-risking. The result is a chilling effect that undermines the very regulatory frameworks designed to bring crypto into the fold.
Some jurisdictions are trying to bridge the gap. In the EU, the Markets in Crypto-Assets (MiCA) regulation aims to create a harmonized licensing regime, but it does not mandate bank access. In the US, state-level trust charters offer a partial solution, but federal banking regulators remain cautious. Meanwhile, crypto-friendly banks like Silvergate and Signature collapsed in 2023, further shrinking the pool of willing partners.
Forward Look
Solving this requires a coordinated effort. Regulators could provide clearer guidance to banks on how to assess licensed crypto firms, reducing the fear of enforcement action. Banks might develop specialized units with crypto expertise, or partner with fintech infrastructure providers that offer compliant banking-as-a-service. Some industry advocates suggest creating a public registry of licensed crypto firms that banks can trust, or even a government-backed guarantee for deposits from licensed crypto payment providers.
Until then, the gap between licensing and banking will persist, leaving many crypto payment firms in a regulatory no-man’s land—licensed, but not banked. For the sector to truly mature, access to banking must be recognized as a fundamental component of the licensing process, not an afterthought.
