SoFi and Square Show Why Bank Charters Matter Now

A FinTech can launch a polished banking app in months, but becoming a bank can take years.

The difference isn’t marketing. It’s legal authority.

It’s also one of the hottest financial stories of a young 2026.

As they rush toward getting their own version of a bank charter, it’s important to note that most nonbank FinTechs (and many cryptocurrency firms) start on rented plumbing. A sponsor bank holds deposits, connects to payment rails and serves as the official issuer for cards. The FinTech owns the interface and the customer relationship, but the regulated permissions sit with the bank.

That works until a partner changes its risk appetite. If the bank tightens compliance, reprices the relationship or exits the program, features can vanish quickly because the FinTech isn’t the chartered entity. In a stress moment, the sponsor bank is the one that examiners call and the one that can pull the plug.

A bank charter flips that dependency. It pulls the company inside the prudential perimeter like exams, capital and liquidity expectations, and a much more demanding compliance and governance regime. In return, it can add three capabilities that are difficult to replicate through partnerships, including deposit funding; balance sheet lending economics; and more durable control over issuing and payments.

One: Deposits are both a product and a funding base. When a company can originate and hold loans on its own balance sheet, it can earn net interest margin instead of living on referral fees and revenue shares. The result is less program manager economics and more bank economics.

This is why some FinTechs have chosen to buy a bank rather than rent one. SoFi’s acquisition of Golden Pacific Bancorp was positioned as a path to operating SoFi Bank, N.A., bringing more funding and economics in-house under a national bank charter. LendingClub’s acquisition of Radius Bancorp followed the similar logic of pairing a digital lending franchise with a regulated bank balance sheet.

Jiko entered the system by acquiring Mid-Central’s bank franchise after the institution converted to Mid-Central National Bank. It’s an example of a FinTech deciding that regulated access was too central to remain a dependency.

Two: Others have tried the build route. Varo won a national bank charter in July 2020, making it one of the few FinTech-born firms operating as a bank rather than as a program layered on top of banks.

Three: The hybrid approach. But the charter conversation is no longer just full-service bank or nothing. More firms are choosing narrower, purpose-built charters that provide some banking capabilities without all of them. Square took the industrial loan company path, as the Federal Deposit Insurance Corp. approved deposit insurance for Square Financial Services, an industrial bank chartered in Utah.

Crypto firms have used trust-company charters as another on-ramp. The New York Department of Financial Services (NYDFS) granted Gemini a limited-purpose trust charter in 2015, and Paxos has highlighted its NYDFS trust charter as a regulatory foundation. Trust charters can support custody and fiduciary-style activity, which is often the point for crypto, but they are not automatically the same as being an FDIC-insured commercial bank.

Wyoming’s Special Purpose Depository Institutions (SPDI) charter is a different carve-out. Wyoming’s banking regulator described SPDIs as fully reserved banks. They are prohibited from making loans with customer fiat deposits and must keep those fiat deposits backed 100% (or more) by unencumbered liquid assets. Kraken received an SPDI charter from Wyoming in 2020, reflecting a push for bank status built around custody and payments rather than credit creation.

In late 2025, the Office of the Comptroller of the Currency (OCC) began conditionally approving additional crypto and stablecoin players, such as Circle and Ripple, to establish national trust banks, Reuters reported Dec. 12. These charters can provide national standing for custody and certain payment-related activity, but they do not come with permission to take deposits or make loans.

Paxos underscores how specific these charters can be. In December, the OCC conditionally approved Paxos’ conversion to an uninsured national trust bank, and the decision letter stated the bank will not take deposits and will not be FDIC-insured.

For banking and FinTech leaders, the charter question comes down to speed versus sovereignty. Renting a bank can be faster and lighter. Owning a charter can deliver more control over funding, pricing and product durability, but it turns “move fast” into a supervised activity, with the fixed costs of capital, governance and examination readiness.

That trade-off is why bank charters keep pulling FinTechs and crypto firms back to the same strategic fork. Do they want to build on the banking system, or become part of it?

Apparently, there are a lot of companies that want to be part of it. There’s a visible waiting room right now, and it includes some recognizable FinTech and nonfinancial brands.

The cleanest public list is the FDIC’s pending queue. The FDIC publishes a rolling list of pending new deposit insurance applications (which, in practice, is a strong proxy for who’s in the charter pipeline because you don’t become an FDIC-insured bank without going through this step).

As of data from Tuesday (Feb. 17), (the FDIC page was last updated Feb. 18), the FDIC shows these pending applications:

Affirm Bank (Henderson, Nevada), received Jan. 23

bunq US Bank, N.A. (New York, New York), received Jan. 7

Augustus National Bank, National Association (Dallas, Texas), received Dec. 19

Mercury Bank, National Association (Salt Lake City, Utah), received Dec. 18

PayPal Bank (Salt Lake City, Utah), received Dec. 15

Private Bank & Trust (Gainesville, Georgia), received Nov. 28

VALT Bank, N.A. (Proposed) (Eagle, Idaho), received Nov. 17

Nubank, National Association (McLean, Virginia), received Oct. 29

TriCoast Bank (Torrance, California), received Sept. 12

United Development Bank (Bellevue, Washington), received Aug. 21

Nissan Bank U.S., LLC (Salt Lake City, Utah), received June 20

Edward Jones Bank (Salt Lake City, Utah), received April 11

OneMain Bank (West Valley City, Utah), received March 13

Stellantis Bank USA (Salt Lake City, Utah), received Fen. 10, 2025

Porticoes National Bank (New York, New York), received April 9, 2024

Separately, the OCC maintains a table of pending digital-asset-related licensing applications for new national bank charters (often limited-purpose trust banks).

On the OCC list, still pending as of the table shown, are:

Laser Digital National Trust Bank, received Jan. 27

World Liberty Trust Company, N.A., received Jan. 6

Augustus National Bank, N.A., received Dec. 18

Foris DAX National Trust Bank, received Oct. 23

Bridge National Trust Bank, received Oct. 15

Connectia Trust, N.A., received Oct. 7

Coinbase National Trust Company, received Oct. 3

National Digital Trust Co., received May 28