The Independent Community Bankers of America (ICBA) has strongly opposed Coinbase's application for a National Trust Company Charter, urging the Office of the Comptroller of the Currency (OCC) to deny the request. In a letter sent on Monday, the ICBA argued that granting the charter to Coinbase's subsidiary could blur regulatory lines between traditional banks and crypto firms, citing untested elements in crypto custody operations and warning that the firm might struggle with profitability during crypto bear markets due to market volatility.
Coinbase filed its application in October as part of a strategy to bridge the gap between the crypto economy and the traditional financial system. Reports indicate the OCC could take 12 to 18 months to review the application, subjecting Coinbase to closer federal scrutiny. In response, Coinbase's chief legal officer, Paul Grewal, criticized the ICBA in an X post, stating, "Imagine opposing a regulated trust charter because you prefer crypto to stay… unregulated. That’s ICBA’s position. It’s another case of bank lobbyists trying to dig regulatory moats to protect their own."
The ICBA urged the OCC to either reject the application outright or extend the review period for more public comment, emphasizing the need to assess legal, prudential, and public interest implications. The OCC, which oversees federal banking charters and digital asset trust licenses, has not yet commented on the matter. A national trust charter would allow Coinbase to provide custody and fiduciary services nationwide without separate state approvals, potentially giving it a competitive edge in institutional custody.
This development occurs amid broader efforts by crypto firms to secure federal charters. Ripple Labs and Circle have also applied for similar charters, with Ripple launching its dollar-backed token, Ripple USD (RLUSD), and Circle expanding its $30 billion stablecoin, USDC. The OCC was expected to conclude its review of Ripple's application recently but has not issued a public decision. The outcome of Coinbase's application could set a precedent for how digital asset custodians integrate with the US banking system, highlighting ongoing tensions between crypto companies and traditional financial institutions.
BTC
ETH
SOL