Coinbase has officially filed for a National Trust Company Charter with the US Office of the Comptroller of the Currency (OCC). This strategic step places the exchange among a growing number of digital asset firms seeking regulatory recognition similar to that of banks.
The application signifies Coinbase’s ambition to enhance its business model and regulatory framework within the United States. According to company representatives, this initiative aims to “bridge the gap between the bitcoin economy and the traditional financial system.” They emphasized that, despite the application, Coinbase does not intend to operate as a bank. Instead, they affirm the importance of establishing clear rules and earning the trust of regulators and customers, which would allow the platform to innovate within a secure environment.
Obtaining the trust charter could provide Coinbase with the capacity to integrate “built-in on-ramp, off-ramp” features, as articulated by Luke Youngblood, a former Coinbase engineer. This capability would eliminate the necessity for third-party banking partners, effectively streamlining transactions for users. Furthermore, approval would enable Coinbase to extend its services beyond merely safeguarding digital assets to include payment solutions and other regulated offerings.
Commenting on Coinbase’s ongoing developments, Brendan Pedersen, a political commentator, pointed out that while trust companies generally engage in fewer business activities than traditional banks, the lines between the two have increasingly blurred over time.
Youngblood reflected on the improvements made to Coinbase’s retail app since his departure in 2022, commending the enhancements and the influx of top engineering talent. He remarked on the challenges the platform faced in delivering features like the Coinbase debit card during his time, noting a significant transformation in user experience.
Coinbase’s pursuit of a trust charter mirrors similar applications made by other players in the digital finance landscape. Notably, Circle, a stablecoin issuer, has also sought a national trust bank license, while Ripple Labs quickly followed suit with its own application. This trend underscores a collective movement within the industry to gain recognized legitimacy and regulatory compliance.
