Coinbase Urges U.S. Banks to Embrace Crypto, Calls for Clearer Regulations

Coinbase, a leading cryptocurrency exchange, has been actively urging U.S. banking regulators to clarify their stance on cryptocurrency services, advocating for a more inclusive and transparent regulatory environment. The company believes that banks should be able to reap the benefits of crypto transactions and has committed to providing better benefits for banks that offer crypto storage and trading options through its platform.

Coinbase has expressed dissatisfaction with the recent policies of the Comptroller of the Currency, which restrict banks from offering crypto services to customers. The current regulatory landscape requires banks to navigate through complex and burdensome application processing materials, making it difficult for them to directly participate in the crypto asset trading business.

To address these challenges, Coinbase has called for more transparent and autonomous regulatory guidance. This would enable banks to collaborate with third-party providers more easily and offer exchange and crypto trading services. Coinbase has requested interference from both the Federal Reserve and the FDIC to support chartered banks in initiating cryptocurrency transactions, execution management, and crypto custody outsourcing.

Coinbase has criticized the U.S. bank regulators for their initial 10-year stance on preventing banks from dealing in crypto, deeming the rules non-democratic. Faryar Shirzad, Coinbase CPO, has emphasized the potential benefits for banks if more transparent regulations were in place.

The crypto industry has played a significant role in supporting political initiatives, including those of former President Donald Trump. However, many crypto analysts argue that the government is overreaching and lacks regular working autonomy in its approach to cryptocurrency regulation.

In response to these concerns, the U.S. Securities and Exchange Commission (SEC) established a task force in January to test a regulatory framework for accommodating crypto assets on the exchange. This move signals a shift in the government's approach to cryptocurrency regulation, potentially opening the door for more investor participation and calculated risk-taking in the crypto market.