On April 2, 2024, the Office of the Comptroller of the Currency (OCC) granted conditional approval to Coinbase National Trust Company to operate with a national trust bank charter. Coinbase’s application was filed on October 3, 2023, with the expectation of creating a New York-based institution focused on custody and services related to digital assets, without traditional bank insurance.
The institution would operate as a wholly owned subsidiary of Coinbase Global Inc., offering solutions exclusively targeted at the institutional market. Its business model foresees a 100% digital operation, without physical branches, and focused on integrating trading and trust services related to the crypto universe. Brian Armstrong, CEO of Coinbase, stated that the charter would allow the alignment of digital asset infrastructure with the federally regulated financial system of the United States.
However, the Independent Community Bankers of America (ICBA) formally opposed the measure. The entity argued that Coinbase’s request does not meet the requirements established by the National Bank Act and the OCC’s rules for national trust banks. Furthermore, the ICBA contested that the regulation applied to these trust banks exceeds the authority granted to the OCC by federal law.
The ICBA’s criticism also included points about insufficiencies in internal risk controls and doubts about the economic viability presented by Coinbase for its operation as a trust bank. According to the group, these deficiencies reflect structural vulnerabilities in the company’s proposal, which could compromise the security and stability of this new operational model. The approved charter authorizes cryptocurrency-related operations without the backing of traditional bank insurance, in addition to requiring less rigor in terms of prudential requirements.
On the other hand, the association highlighted concerns about the expansion of fiduciary powers to entities that do not fit the conventional banking profile, emphasizing that this may create uncertainties in the regulatory supervision of the financial system. The ICBA also warned of the risk of precedents allowing other non-bank organizations to request similar charters, which could affect the uniformity of rules applied to financial institutions.
Formally, the ICBA sent a letter to the OCC detailing its objections, requesting the revocation or at least a review of the rule authorizing this type of trust charter. The association emphasized the need for the regulatory body to remain aligned with its statutory authority and existing legal precedents, to avoid discrepancies in sector oversight.
This debate takes place at a time when digital asset companies are seeking deeper integration with the traditional banking system in the United States. The approval of Coinbase’s bank charter may establish a regulatory milestone that will directly influence future decisions and practices for the North American institutional crypto segment.
The conclusion of the process still depends on further analyses by the OCC, which must evaluate the objections presented by the ICBA and the regulatory impact of the new charter. In addition to the decision in the United States, the development of this matter will be closely monitored by investors and international regulators interested in the evolution of the digital financial sector.
