Coinbase, the largest crypto exchange in the US, has achieved a major milestone after securing a key approval from the main banking regulator, which could unlock a broader market for the company.
Coinbase Wins Major OCC Approval
On Thursday, Coinbase announced it received conditional approval from the Office of the Comptroller of the Currency (OCC) to charter Coinbase National Trust Company, marking a crucial step to becoming a federally regulated crypto custodian.
In the official statement, Coinbase outlined the scope of the charter, explaining that the company is not becoming a commercial bank and will not take retail deposits or engage in fractional reserve banking.
“This charter is about bringing federal regulatory uniformity to the custody and market infrastructure business we have been building for years. The OCC charter was designed precisely for this purpose — to provide clear oversight over assets in safekeeping — and that is exactly how we intend to use it,” the announcement read.
The conditional OCC approval allows Coinbase to “build the next chapter of finance,” the company noted, bolstered by the regulatory confidence, and validates its approach of “engaging with regulators, earning their trust, and operating to the highest standards.”
Moreover, the approval signals that the federal regulatory framework is transforming to align with the evolving landscape that crypto has been gradually shaping.
In an interview, Greg Tusar, Co-CEO of Coinbase Institutional, affirmed that “the ability to have a federal framework for our custody business is important,” adding that “this is about us growing our reach and being able to conduct new business that we may not have been able to before.”
Crypto Trust Banks Face Opposition
Coinbase applied for the charter last October and has now joined the list of firms that have received the main banking regulator’s approval. As reported by Bitcoinist, the OCC approved conditional bank charters for Ripple, Circle, BitGo, Paxos, and Fidelity in December.
In February, stablecoin platform Bridge, owned by Stripe, and crypto exchange Crypto.com announced they had also secured the OCC’s conditional approval to establish a national trust bank. However, US banks have raised concerns that the approvals could blur the lines between banking activities and lead to regulatory arbitrage.
Nearly two months ago, the American Bankers Association (ABA) asked the banking regulator to postpone its review of applications for crypto bank charters, suggesting that the approvals should wait until key regulatory uncertainties are resolved.
In its letter, ABA called for patience as emerging regulatory frameworks take shape, proposing that the review process continue when the US Congress completes the rules that will ultimately govern many recent applicants for the OCC’s charter.
The banking lobby cited uncertainty surrounding emerging business models, the need for increased transparency in the charter application and decision-making processes, and the absence of finalized federal oversight as key reasons for the proposed delay.
US Senator Elizabeth Warren also sent a letter to Comptroller Jonathan Gould asking the banking regulator to pause its review of the Trump Family’s main crypto venture, World Liberty Financial, which applied for a national trust charter in January.
