Investors are piling into Telcoin after the fintech firm joined the handful of crypto players to secure banking charters in the US.
On Thursday, the bank and stablecoin issuer received the charter from the Nebraska Department of Banking and Finance following a conditional approval in February.
The charter allows the firm to operate a stablecoin and digital asset business within the regulated financial industries of its home state.
This means it can accept customer deposits, make loans, and offer many of the same services a bank would offer its clients. These services could be denominated in Telcoin’s native eUSD stablecoin and tap decentralised finance apps.
Telcoin’s TEL token jumped 75% on the news, hitting a market value of over $515 million.
Telcoin isn’t the only firm eying the potential of bringing crypto and the existing financial system closer together.
Several other crypto firms are rushing to offer banking services that leverage stablecoins. In July, President Donald Trump signed the Genius Act into law, key legislation that sets out rules for dollar-pegged stablecoins.
Last month, US crypto exchange Coinbase applied for a National Trust Charter. The charter would allow Coinbase to operate as a trust bank, which focuses on fiduciary activities such as safekeeping assets and providing custody services, but forgoes other activities such as issuing loans.
Several other crypto firms, including Circle, Ripple, and Paxos, have also applied for National Trust Charters.
Those firms hope to join Anchorage Digital, the only crypto-native firm to hold a federal banking charter. Erebor, a digitally-native bank backed by Peter Thiel’s Founders Fund, has also received conditional approval for a National Trust Charter.
Drumming up business
Paul Neuner, Telcoin’s founder and CEO, is betting that the charter will help his firm drum up business from other banks.
“As soon as they realise, ‘well, shit, we want to get in on this,’ they’re going to turn to somebody like us,” Neuner told DL News.
Instead of having to build out compliance teams and company policies for crypto, Neuner and his team hope small- and medium-sized banks will instead turn to Telcoin to allow them to offer crypto services to regular banking customers.
Telcoin plans to let customers use its eUSD stablecoin for payments, remittances, and savings.
The firm said its Nebraska charter is also the first to explicitly authorise connecting US customers to DeFi.
The idea of fintech firms like Telcoin letting customers tap into the yields and services available through DeFi protocols isn’t new.
