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Wise Bank Bid Denied Amid U.S. Policy Shift
24 Jul
Summary
- Wise's bid for a US national trust bank was denied by regulators.
- The denial was due to incompatibility with new Federal Reserve policies.
- Wise plans to reapply under the GENIUS Act for digital asset focus.
Wise, a London-based financial technology company, saw its shares fall by 10% on Friday following the rejection of its application to establish a national trust bank in the United States. Regulators cited incompatibility with new Federal Reserve policies concerning payment system access as the primary reason for the denial.
Wise had aimed to facilitate direct U.S. dollar payment settlements with the Federal Reserve. However, significant changes in U.S. payment regulations since the application's submission in June of last year rendered its initial approach unviable, especially with the Federal Reserve pausing account access for uninsured trust banks.
The company announced its intention to pursue a new application under the GENIUS Act. This legislative framework is designed to address digital assets, including stablecoins, indicating Wise's strategic pivot. The firm believes its existing infrastructure is capable of integrating digital assets with current payment systems.
Additionally, regulators flagged a previous U.S. consent order from last year concerning compliance violations. Wise asserted that it has since enhanced its safety protocols and compliance processes in response to this order.
