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Coinbase Expands Regulatory Ambitions
Crypto exchange Coinbase has filed an application with the US Office of the Comptroller of the Currency (OCC) for a National Trust Company Charter, joining a growing list of American crypto firms pursuing the same license.
In a statement released Friday, Coinbase described the move as a major milestone:
“Coinbase is taking a significant step in expanding our business capabilities and regulatory oversight beyond the existing framework, paving the way for innovation and growth in building a modern financial system powered by digital assets.”
Bridging the Gap with TradFi
According to the exchange, the charter would help “bridge the gap between the crypto economy and traditional financial system.” However, Coinbase stressed that its mission remains focused on digital assets rather than banking.
“Coinbase has no intention of becoming a bank. It is our firm belief that clear rules and the trust of our regulators and customers enable Coinbase to confidently innovate while ensuring proper oversight and security,” the company stated.
Luke Youngblood, a former Coinbase employee who helped develop the platform’s staking rewards program, explained on a podcast Friday that the license could allow Coinbase to “offer basically built-in on-ramp, off-ramp, and no longer have to use partner banks on-ramps, off-ramps.”
Approval of the charter would also allow Coinbase to expand beyond custody services, with the possibility of offering payments and related services under clearer regulatory guidance.
Trust Charter Limitations and Industry Impact
Political analyst Brendan Pedersen pointed out that while trust companies are technically more restricted than banks, those boundaries have become less rigid over time:
“Trusts theoretically have more limitations than other types of banks when it comes to business activities, but the distinction has blurred over the years.”
Former Exec Praises Coinbase’s App Improvements
Youngblood also commented on Coinbase’s retail application, noting its progress since his departure in 2022:
“When I worked there back in 2022, before I left, it was not that great. The features, like the Coinbase debit card, didn’t work very well,” he said.
He added that the company’s recent hires have made a clear difference:
“You can really tell they’ve hired some top engineering talent.”
A Growing Trend Among Crypto Firms
Coinbase is not alone in pursuing the National Trust Charter. On July 1, stablecoin issuer Circle applied to establish a national trust bank in the US. Shortly after, Ripple Labs followed with its own application.
Ripple CEO Brad Garlinghouse said that approval would mark a milestone for the industry:
“If the license is approved, it would be a new (and unique!) benchmark for trust in the stablecoin market.”
