Coinbase is actively seeking a National Trust Company Charter from the Office of the Comptroller of the Currency (OCC), joining a trend among US-based cryptocurrency firms that are also seeking this type of license.
“Coinbase is taking a significant step in expanding our business capabilities and regulatory oversight beyond the existing framework, paving the way for innovation and growth in building a modern financial system powered by digital assets.”
As stated by Coinbase on Friday.
Aiming to Connect with Traditional Finance
With the goal of bridging the gap between the crypto economy and traditional financial structures, Coinbase maintains that it does not aim to pivot towards becoming a bank, emphasizing:
“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.”
Luke Youngblood, a former Coinbase employee responsible for developing Coinbase staking rewards, discussed in a recent podcast that the charter would allow for a streamlined process for on-ramps and off-ramps, eliminating the need for partner banks.
Coinbase
Source: Coinbase
With the potential approval of the National Trust Charter, Coinbase anticipates expanding its services beyond custody operations to include payments and other similar offerings under clearer regulations.
Political commentator Brendan Pedersen noted:
“Trusts theoretically have more limitations than other types of banks when it comes to business activities, but the distinction has blurred over the years.”
Enhancements to Coinbase’s Application
Youngblood noted the significant improvements in the Coinbase app since his departure in 2022, stating, “When I worked there back in 2022, before I left, it was not that great. The features, like the Coinbase debit card, didn’t work very well. You can really tell they’ve hired some top engineering talent.”
Several other crypto companies, including Circle and Ripple Labs, have also applied for the National Trust Charter recently, highlighting a trend in the industry.
“If the license is approved, it would be a new (and unique!) benchmark for trust in the stablecoin market,” stated Ripple Labs CEO Brad Garlinghouse.
