Coinbase has now applied for a national trust charter with the Office of the Comptroller of the Currency (OCC). This move comes as the American crypto exchange seeks to expand its payment operations amid the rise of favorable crypto policy in the US.
Coinbase Does Not Aim To Be A Bank, VP Says
By definition, the National Trust Charter is a federal charter that allows an institution to operate as a national trust bank. Unlike full-service commercial banks, these types of banks are usually non-depository institutions with their primary activity being limited to fiduciary and trust service, and custody and asset management.
Therefore, this license is particularly attractive to many crypto firms that want to offer trust-type services (e.g., custody of digital assets, stablecoin reserves) at scale and across jurisdictions in the US. However, Coinbase’s focus is on the fiduciary status the license offers. The exchange has expressed its intentions to expand its services beyond custody towards payments and other services, while also denying any intention to morph into a bank.
Coinbase’s VP of Institutional Product, Greg Tusar, explained in a blog post saying:
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. If approved, the charter would continue to open up opportunities for Coinbase to launch new products beyond custody, including payments and related services, with the confidence of regulatory clarity, fostering broader institutional adoption.
Tusar has described Coinbase’s application for a national trust charter as a “significant step” in growing the exchange’s business operations and encouraging innovation in the mainstream adoption of crypto assets.
The exchange exec. said:
While progress is underway in Congress to craft clear market structure, crypto is already woven into the fabric of the financial system. An OCC charter will streamline oversight for new offerings and enable continued innovation to integrate digital assets into traditional finance. We’re not the first crypto company to seek a federal charter and we won’t be the last.
Aside from Coinbase, Other crypto firms that have filed similar applications with the OCC include blockchain company Ripple Labs and stablecoin operator Paxos.
Coinbase Payments Push
In addition to seeking a national trust charter, Coinbase has taken other steps to force a venture into the payment markets. In June, the exchange popularly struck a deal with Shopify, which would allow the e-commerce platform to introduce the USDC stablecoin as part of its payment options. At press time, COIN trades at $382 following a slight 2.14% gain in the past day.
Featured image from Flickr, chart from Tradingview
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