Coinbase Becomes Latest Crypto Company to Receive Conditional US Approval

Coinbase becomes the latest crypto company to get conditional US approval for a trust charter, allowing it to serve as a crypto custodian on a federal basis. The company announced that it wasn’t planning on becoming a bank in the traditional sense.

Coinbase and the National Trust Banking Charter

Coinbase joins a long list of digital asset firms pushing further into the traditional finance space. The charter will allow Coinbase to manage assets for larger entities, with conditional approval from the Office of the Comptroller of the Currency.

Benefits of the Charter

• Hold client assets and handle trade settlement within a federally regulated structure
• Positioned to build the next chapter of finance with regulatory confidence
• Ability to serve as a crypto custodian on a federal basis

Crypto Companies and Traditional Finance

A number of top crypto companies have received conditional approval, including Ripple, Circle, Crypto.com, and Paxos. The idea with the charter is that crypto companies will be able to hold client assets and handle trade settlement within a federally regulated structure.

Stablecoins and Banking

The banking lobby has urged the OCC to reject Coinbase’s application, citing concerns over stablecoins and the potential for crypto companies to muscle in on their turf. Banks are worried that crypto-native companies are offering rewards for holding digital tokens, which could lead to a loss of deposit base.

Key Takeaways

• Coinbase receives conditional approval for a national trust banking charter
• The charter allows Coinbase to serve as a crypto custodian on a federal basis
• Crypto companies are pushing further into traditional finance
• Stablecoins are a key area of concern for traditional banks

Frequently Asked Questions

What is a national trust banking charter?

A national trust banking charter allows a company to hold client assets and handle trade settlement within a federally regulated structure.

How will the charter affect Coinbase?

The charter will allow Coinbase to serve as a crypto custodian on a federal basis, managing assets for larger entities and building the next chapter of finance with regulatory confidence.