According to a Bitcoinist report on March 19, the Federal Deposit Insurance Corporation (FDIC) has approved Bitcoin advocate and Twitter CEO Jack Dorsey's application for the establishment of Square Financial Services. This means that Square, a financial services and mobile payments company that allows bitcoin payments, will soon be able to provide commercial loans.
First industrial bank approved in ten years
The Federal Deposit Insurance Corporation's approval of Square Bank is a major initiative. In fact, applications for such industrial banks have never been approved for more than a decade. According to FDIC Chairman Jelena McWilliams:
- U.S. $ 6 trillion economic stimulus plan is immediate, Bitcoin may become the biggest winner
- Will the currency hinder the development of Bitcoin?
- Opinion: Ethereum is promoting crypto market recovery
- BTC is at the bottom, patience is the best investment
- After April Fool's Day, Bitcoin is back with confidence rather than price.
- Crypto market dives collectively, sells out USD 2 billion, bitcoin price has "halved"
The FDIC evaluated all deposit insurance applications, including industrial banks, based on the same statutory factors in the Federal Deposit Insurance Act. It has been more than a decade since the FDIC last approved deposit insurance for industrial banks or industrial loan companies.
Square financial services company to provide commercial loans
According to the press release, Square Bank will use Square's existing payment system to provide commercial loans to merchants. Its headquarters will be located in Salt Lake City, Utah, but it is still awaiting approval from local financial institutions.
Once approved, the bank should officially open for business in 2021. Getting FDIC approval is not easy. In fact, applications for deposit insurance are subject to strict scrutiny and must meet seven or more different factor standards, such as general characteristics and suitability of institutional management, institutional capital structure, and future profit prospects.
At the same time, preparing such a bank requires a lot of funding. Under an official approval order, Dorsey must raise at least $ 56,005,350 in initial invested capital.
Dorsey had predicted that Bitcoin would become a global currency and replace the US dollar in the next decade. The helm of Square is so optimistic about Bitcoin development, and its involvement in the industrial banking business will undoubtedly help the crypto space.