The Nebraska Department of Banking and Finance recently conditionally approved blockchain neobank Telcoin Bank to open in the state, the company announced on Feb. 4. Approval brings Telcoin closer to becoming the first regulated crypto bank in the country and Nebraska’s first digital asset depository institution.
Telcoin Bank is expected to launch operations early this year through releasing the first bank-issued stablecoin, eUSD. Telcoin Bank expects to eventually be authorized to take crypto deposits, enable DeFi staking programs and provision digital asset loans.
Telcoin Founder and CEO Paul Neuner testified last year that Telcoin could be a correspondent bank for community banks by providing banking services for digital assets. The company, if approved, would be headquartered in Norfolk, Neb. The Singapore-based company also has subsidiaries in Lithuania, Canada and Australia.
While the state of Wyoming and Office of the Comptroller of the Currency have issued three charters for digital asset providers, none have been authorized to access the Federal Reserve payments system. Custodia Bank, which operates under Wyoming’s Special Purpose Depository Institutions charter, was started with the same purpose but has not secured a master account with the Federal Reserve.
Neuner told the American Banker in December that he had acquired a 24.9 percent stake in Battle Creek State Bank to eventually bring it under the same bank holding company as Telcoin’s digital asset institution.
“This approval marks a major milestone for Telcoin and the entire U.S. crypto industry,” Neuner said. “I’ve always believed that the key to making crypto usable in payments and mainstream finance is a digital asset bank with native connections to the existing financial system.”
In a letter to Nebraska Department of Banking and Finance Director Kelly Lammers, the Nebraska Bankers Association said Telcoin Bank should instead be referred to as Telcoin Digital Asset Bank, “to protect consumers from being misled into believing that nonbank businesses are subject to the same strict regulations as banks.”