The Office of the Comptroller of the Currency (OCC) has granted Coinbase a conditional approval for a national trust bank charter, positioning the crypto exchange to expand beyond custody into federally supervised payments and infrastructure services. The move drew swift opposition from community banking representatives, who argue the decision could weaken consumer protections.
OCC’s Conditional Green Light
The conditional approval applies to Coinbase’s application for “Coinbase National Trust Co.” If finalized, the charter would allow the company to operate as a national trust bank under the OCC’s oversight. The OCC is a bureau of the U.S. Treasury that charters, regulates, and supervises national banks and federal savings associations.
Coinbase Chief Legal Officer Paul Grewal said in a CNBC interview that the decision could broaden the firm’s U.S. product suite. “Over the long haul we will be able to explore, with the OCC, offering not just custody products but also other infrastructure products, particularly around payments, that we think will expand and extend crypto payments in all sorts of new and interesting and important directions,” he said.
Community Bankers Push Back
The Independent Community Bankers of America (ICBA) responded with a letter opposing the OCC’s conditional approval of Coinbase National Trust Co. ICBA President and CEO Rebeca Romero Rainey called the decision “a grave mistake,” arguing it could put U.S. consumers at risk.
The ICBA contends the application has significant shortcomings, including what it describes as inadequate risk controls, uncertain profitability, and unresolved resolution risks. The group also warned that an influx of charter applications from nonbank firms signals an attempt to secure the benefits of a federal bank charter without being subject to the full range of bank regulatory safeguards, potentially undermining consumer protection and financial stability.
Debate Over Uninsured National Trust Banks
Beyond Coinbase’s application, the ICBA criticized the OCC’s final rule on national trust bank chartering. The trade group objects to the OCC’s plan to charter uninsured national trust banks that could conduct non‑fiduciary, crypto-related business without being subject to the Bank Holding Company Act or the prudential standards applied to FDIC‑insured institutions. The ICBA urged the OCC to withdraw the rule or reissue a revised proposal aligned with statutory authority and longstanding precedent.
Market Reaction
Coinbase shares (COIN) traded around $171 as of the latest session, showing little change from Wednesday’s close.