Coinbase's Federal Charter Bid Sparks Traditional Bank Backlash

Coinbase Global Inc. has submitted an application for a national trust charter with the U.S. Office of the Comptroller of the Currency (OCC), a move that would position the crypto exchange under federal regulatory oversight without transforming it into a traditional bankCoinbase Strengthens Commitment to Innovation and Oversight with National Trust Charter Application^[1]. The company emphasized that the charter would enable it to expand its institutional custody business and introduce new services such as payments and settlement, leveraging the clarity of federal regulations to foster institutional adoptionCoinbase (COIN) News: Applies for National Trust Charter for …^[2].

The proposed charter, a special-purpose national trust bank license, would allow Coinbase to safeguard customer assets, facilitate payments, and settle transactions without engaging in lending or accepting deposits. Unlike a full-service bank charter, this framework does not include FDIC insurance for customer accountsCoinbase applies for federal trust bank license, says 'we have no ...^[3]. Coinbase already operates a regulated custody service under New York's BitLicense regime, which it described as a foundational step toward seeking broader federal oversightCoinbase Strengthens Commitment to Innovation and Oversight with National Trust Charter Application^[1]. The company has no intention of becoming a bank, stating that clear rules and regulatory trust are essential for innovation while maintaining security and complianceCoinbase (COIN) News: Applies for National Trust Charter for …^[2].

The application aligns with broader industry trends, as over a dozen crypto firms, including Circle, Ripple, and Paxos, have also sought federal charters this yearCoinbase applies for federal trust bank license, says 'we have no ...^[3]. The OCC's national trust bank charter has drawn scrutiny from traditional banking groups, who argue that such licenses could create unfair advantages by enabling stablecoin-based services to bypass existing banking regulations. The Independent Community Bankers of America (ICBA) has specifically opposed similar applications, warning of risks like deposit drainage and fraud.

Coinbase's move follows recent legislative developments, including the July 2025 enactment of the GENIUS Act, which established a federal framework for dollar-pegged stablecoins and designated the OCC as the primary regulatorTrade groups push back on crypto firms’ bank charter …^[7]. The company's existing custody business, which holds $425 billion in crypto assets for clients, could benefit from the streamlined oversight and expanded product offerings a federal charter would provideCoinbase applies for federal trust bank license, says 'we have no ...^[3]. Additionally, Coinbase has partnered with major banks like PNC and JPMorgan Chase to integrate crypto services into traditional financial systemsCoinbase applies for federal trust bank license, says 'we have no ...^[3].

The outcome of Coinbase's application could set a precedent for how federal regulators engage with crypto firms, potentially paving the way for further integration of digital assets into the financial sector. However, the process will require navigating complex regulatory debates, including concerns about competition, consumer protection, and the balance between innovation and systemic riskWhat’s the Impact of Coinbase’s National Trust Charter Application?^[4]. As the OCC reviews the application, Coinbase has pledged to collaborate with regulators and address public feedbackCoinbase Strengthens Commitment to Innovation and Oversight with National Trust Charter Application^[1].