Coinbase has received conditional approval from the Office of the Comptroller of the Currency (OCC) to establish the Coinbase National Trust Company, a non-insured national trust bank slated to be headquartered in New York. This move is significant as it signals Coinbase’s intention to operate under federal regulation, potentially replacing the current state-by-state licensing framework for its offerings.
The preliminary approval requires Coinbase to implement robust compliance systems, recruit essential personnel, undergo regulatory reviews, and demonstrate effective risk management and anti-money laundering protocols before it can obtain a full banking charter. Achieving a national trust bank charter would streamline Coinbase’s regulatory oversight, allowing it to operate under a single federal regulator—the OCC—rather than maintaining a myriad of state money transmitter licenses. This status will enable Coinbase to provide services such as custody and safekeeping of digital assets, acting as a qualified custodian in accordance with SEC regulations.
In its recent blog post, Coinbase clarified that it does not intend to operate as a commercial bank. “Coinbase is not becoming a commercial bank. We will not be taking retail deposits. We will not be engaging in fractional reserve banking,” the company stated.
Looking forward, Coinbase’s chief legal officer has shared plans to expand its offerings beyond custody services to include payment infrastructure products, with a focus on increasing the use of stablecoins like USDC as a viable global payment option.
Coinbase’s development comes amid intensified competition in the crypto industry, as several firms seek federal charters. For instance, Circle has applied for a national trust bank license named First National Digital Currency Bank and has already received conditional approval. Similarly, Crypto.com obtained conditional approval for its Foris Dax National Trust Bank earlier this year.
However, this momentum towards federal oversight has faced pushback. The Bank Policy Institute, which represents major financial institutions like JPMorgan and Goldman Sachs, is contemplating legal action against the OCC over concerns regarding the fairness of the current regulatory landscape in the cryptocurrency sector.
