- Coinbase urges regulators to confirm that banks can support crypto firms, bridging gaps in traditional finance and blockchain.
- Brian Armstrong envisions a seamless financial system where spending, investing, and borrowing integrate efficiently via blockchain.
- Regulatory clarity is crucial as crypto adoption grows, ensuring banks and exchanges can collaborate without legal uncertainty.
Coinbase’s CEO, Brian Armstrong said recently that the platform is increasingly playing a part in finance. He claimed, “Coinbase holds $0.42 trillion in customer assets, which puts it as the 21st largest US bank by assets, making it the eighth largest brokerage by assets under management.
Armstrong highlighted how cryptocurrency erases borders that traditionally separate financial systems. As such, it reduces the dividing line between banks, brokerages, and payment companies. He argued that crypto should provide one big financial system, eliminating inefficiencies.
Coinbase Seeks Regulatory Certainty
U.S. regulators are being pressured by Coinbase to guarantee banks’ ability to serve cryptocurrency businesses. To the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, the exchange sent letters.
The request urges the OCC to retract an interpretive letter that restricts banks from engaging with crypto firms. Furthermore, Coinbase asked the Fed and FDIC to confirm that state-chartered banks can handle crypto custody and execution.
A separate letter from three law firms supports Coinbase’s stance. Arnold and Porter Kaye Scholer, Cleary Gottlieb Steen & Hamilton, and Wilmer Cutler Pickering Hale & Dorr argued that federal laws already permit banks to engage with crypto. However, Coinbase insists that regulators must explicitly confirm this.
A Call for Modernized Financial Services
Armstrong pointed out flaws in the traditional banking model. He questioned why money in checking accounts loses value instead of earning interest like short-term treasuries. Moreover, he argued that financial accounts should combine spending, investing, and borrowing seamlessly.
As crypto adoption increases, more global GDP will move onto blockchain rails. Consequently, transactions will become more efficient, fostering economic freedom. Additionally, Coinbase’s policy chief Faryar Shirzad stressed the importance of regulatory clarity. He stated that banks must have the freedom to collaborate with crypto firms. This would enable them to provide secure trading and exchange services to their customers.
Coinbase’s regulatory push signals a broader shift in finance. The industry is moving towards a more integrated financial ecosystem. With clear guidelines, banks and crypto firms can work together, ensuring a more efficient and transparent financial system.
