Important points
Community banks oppose Coinbase’s charter bid:
The Independent Community Bankers of America (ICBA) formally opposed Coinbase’s application. National Trust Company Charterciting governance, risk management, and profitability concerns related to cryptocurrency market volatility.
Coinbase accuses banks of protectionism:
Paul Grewal, Coinbase’s chief legal officer, criticized the ICBA’s stance, arguing that traditional banks seek to maintain a “regulatory moat” to prevent crypto-focused companies from gaining equal footing under federal oversight.
Approval of the Charter could reshape crypto regulation.
If granted, the charter would allow Coinbase to operate under direct OCC supervision, bridging traditional banking and digital asset services, and could set a precedent for other crypto companies seeking federal trust status.
The Independent Community Bankers of America (ICBA), a trade group for small U.S. banks, has formally opposed Coinbase’s proposed National Trust Company Charter.
overview
in letter On November 3, ICBA argued to the Office of the Comptroller of the Currency (OCC) that Coinbase’s proposed charter:
“The approval requirements for establishing a national bank are not met.”
Under existing laws and regulations.
This has raised concerns about governance, profitability during market downturns, the legal status of interpretive opinions that enable crypto-related activities in the trust charter, and the risks posed by Coinbase’s core revenue connections to the crypto market, among other issues.
ICBA asked the OCC to either deny the application or extend its review period to allow for broader public scrutiny of the legal and prudential implications.
Coinbase fights back: Regulatory moat
On Tuesday, Coinbase Chief Legal Officer Paul Grewal strongly pushed back against X. He pointed out:
“Imagine opposing a regulated fiduciary charter on the grounds that cryptocurrencies prefer to remain unregulated. That is the ICBA position. This is another case of bank lobbyists trying to dig a regulatory moat to protect what is theirs. From scrapping laws in pursuit of rewards to blocking charters, protectionism is not consumer protection.”
Coinbase claims that it is
Not aiming to become a bank
It calls for a regulatory structure that allows custodial and trust accounting activities to be conducted under federal oversight rather than through this Charter. they are going to
“Bridging the gap between the crypto economy and the traditional financial system.”
What is at stake and what will happen next?
If approved, the charter would bring parts of Coinbase’s operations under direct federal oversight through the OCC, potentially giving the company legitimacy and reducing friction with other financial infrastructure.
But the review can take time, with reports saying it could take 12 to 18 months for the OCC to complete the application. Meanwhile, other cryptographyFintech companies such as Circle, Ripple, and Paxos are also pursuing similar federal banking and trust charter routes.
Banks are concerned about risks, particularly a decline in the value of cryptocurrencies, new legal structures for storing cryptocurrencies based on bank-type rules, and the potential for instability due to stress events. On the contrary, proponents argue that bringing crypto companies under recognized regulation would increase consumer protection and oversight, and could be key to integrating traditional finance with new digital asset models.
