- Coinbase applied for a national trust charter to expand its crypto custody and financial services.
- The OCC charter would move Coinbase under federal oversight and help it launch new financial products.
- Banking groups oppose crypto firms like Coinbase gaining trust charters due to concerns over financial risks.
Coinbase has filed an application with the Office of the Comptroller of the Currency (OCC) seeking a national trust charter. Other applications by Ripple, Circle, and Paxos precede the action. This step will help Coinbase expand its custody business and venture into new financial services.
The company is currently regulated by the New York Department of Financial Services (NYDFS). A charter of national trust, however, would bring regulatory control to the federal level. This change would allow Coinbase to streamline compliance for future products. It also opens the door for the exchange to expand services beyond digital asset custody.
Response to Regulatory Developments
The application is in line with the advice made by the U.S. Securities and Exchange Commission (SEC). The guidance enables state-chartered trust firms to act as qualified custodians of crypto assets. Coinbase’s decision signals a shift toward greater regulatory alignment.
Although the charter of the OCC will bring more federal regulation, Coinbase explained that it does not want to turn into a bank. Rather, the company is aiming to foster innovation but ensure regulatory transparency. The exchange has also highlighted that safe operations and compliance are a priority.
Banking Sector Opposition
Some banking associations have opposed national trust charters for crypto firms. They argue that allowing crypto entities into traditional financial roles could pose systemic risks. Ripple, Circle, and Paxos have all faced similar resistance.
Despite the pushback, Coinbase continues to expand into areas traditionally held by banks. The company has hinted at future offerings in payments and financial services. These could include new financial products that bridge digital and traditional finance.
Coinbase’s move comes as banks urge lawmakers to impose restrictions on crypto yield programs. Banking industry groups have reportedly lobbied to include such limitations in the CLARITY Act. These efforts aim to restrict stablecoin holders from earning rewards.
Coinbase’s Growing Role in U.S. Finance
Coinbase has deepened its presence in the U.S. financial infrastructure. It recently partnered with JPMorgan Chase to streamline crypto transactions. The company also manages digital assets for the U.S. Marshals Service. This partnership involves custody and disposal of seized cryptocurrencies.
Coinbase also plays a key role in supporting crypto ETFs. It provides custody services for offerings by BlackRock and Fidelity. These partnerships show how digital assets are becoming part of the broader financial system.
The company’s CEO has remained vocal on market regulation. He continues to advocate for a crypto market structure bill currently under debate in Congress.
