Coinbase Urges U.S. Regulators to Clear Path for Banks to Offer Cryptocurrency Services

Coinbase, the largest cryptocurrency exchange in the U.S., is calling on federal regulators to clarify rules allowing banks to offer digital asset services, challenging what it describes as unnecessary barriers in the crypto banking sector. In letters seen by Bloomberg, Coinbase addresses three major banking regulators—the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board of Governors, and the Federal Deposit Insurance Corporation (FDIC)—urging them to provide explicit confirmation that banks can provide crypto custody and trading services, either directly or through third-party providers.

Coinbase's chief policy officer, Faryar Shirzad, stressed the importance of regulatory clarity, stating, "We need clarity that banks can work with qualified third-party providers to serve their customers' crypto needs." The company argues that while federal laws already permit banks to engage in crypto activities, regulatory uncertainty has prevented many institutions from entering the market.

Coinbase sent a letter to the OCC, requesting the withdrawal of an interpretive letter that the company claims creates a de facto application process preventing banks from entering the digital asset market. The exchange also asked the Fed and FDIC to confirm that state-chartered banks under their supervision can provide and outsource crypto custody and trading execution services.

The push comes as the House Oversight Committee investigates Operation Choke Point 2.0, examining alleged regulatory actions limiting banking access for crypto firms. The FDIC and other regulatory bodies have reportedly applied informal pressure on banks to limit services to industries considered risky, including digital assets. Coinbase uncovered multiple instances where the FDIC discouraged banks from providing crypto banking services, including internal documents that showed the agency asked banks to "pause" crypto-related activity.



Coinbase's legal chief, Paul Grewal, and CEO of MARA Holdings Fred Thiel are scheduled to testify before the Subcommittee on Oversight and Investigations of the US House Financial Services Committee on Thursday regarding the alleged systematic debanking of crypto firms under the Biden administration.

The crypto exchange's legal team, backed by three law firms, contends that current laws and regulations already permit banks to engage in crypto services and work with third-party providers. The company is requesting regulators to formally acknowledge this existing legal framework.

In conclusion, Coinbase's push for regulatory clarity and confirmation of banks' ability to offer crypto services is crucial for the growth and development of the crypto ecosystem. By addressing the legal uncertainty and pressure on banks to limit crypto ties, regulators can foster a more inclusive and robust crypto market, ultimately benefiting both consumers and financial institutions.