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Digital asset-focused fintech firm LevelField Financial said it has secured conditional regulatory approval to acquire Chicago-based Burling Bank, marking one of the most notable crypto-banking acquisitions in recent months.
The move could see LevelField become the first Federal Deposit Insurance Corporation-insured chartered bank to offer certain crypto-integrated banking services across all US states and territories, LevelField said in a statement on Monday. Details of the deal weren’t disclosed.
The approval from the Illinois Department of Financial and Professional Regulation puts Burling Bank one step closer to being renamed LevelField Bank. The parties are still awaiting approval from the Board of Governors of the Federal Reserve to become a bank holding company.
The newly-branded LevelField would seek to offer 24/7/365 crypto-banking services, including Bitcoin (BTC)-backed loans, Bitcoin rewards credit and debit cards, as well as digital asset trading and custody services.
Burling Bank is a relatively small commercial bank, with around $196 million in net assets and roughly $158 million in customer deposits, according to Visbanking data.
LevelField will focus on serving businesses in under-banked sectors, all while benefiting from the security and regulatory oversight of the US banking system, CEO Gene A. Grant II said.
“Today’s approval is an important milestone for LevelField. I am grateful to our investors and partners for backing the patient, disciplined work it took to meet the necessary supervisory standards that protect consumers and businesses and make the US the home of the world leading banking system.”
Crypto industry’s relationship with banks remain tense
The move also strengthens ties between the crypto and banking sectors in the US, which continue to face friction despite a recent rise in institutional adoption.
For example, US banking groups have expressed concern that widespread use of yield-bearing stablecoins could drain deposits from the banking system, which they rely on to fund loans and offer competitive savings products.
Stablecoins could force $6.6 trillion to leave banking system
Those fears have been backed by the US Treasury Department, which estimated in April that widespread stablecoin adoption could lead to over $6.6 trillion in deposit outflows from the traditional banking system.
Related: Cboe to launch perpetual-style Bitcoin and Ether futures in US
The Federal Reserve also has a cautious stance toward crypto, particularly since the likes of crypto-friendly banks Silvergate Bank, Silicon Valley Bank, and Signature Bank fell bankrupt or were forced into liquidation in early 2023.
Magazine: Good luck suing crypto exchanges, market makers over the flash crash
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