Crypto exchange Coinbase has applied for a national trust charter, joining the likes of Ripple, Circle, and Paxos. This development comes as the crypto industry faces resistance from banking associations, which believe that crypto firms pose a threat to their operations.
Coinbase Applies For National Trust Charter
In a blog post, the crypto exchange announced that it has applied for a national trust company charter from the Office of the Comptroller of the Currency (OCC) in a bid to expand its custody business. The company noted that this is a significant step in expanding its business capabilities and regulatory oversight beyond the existing framework.
Notably, this development comes just days after the SEC issued new guidance that enables state-chartered trust companies, such as Coinbase, to act as qualified custodians for crypto assets. However, the top crypto exchange is now looking to expand its reach, joining the likes of Ripple, Circle, and Paxos that have earlier applied for a similar license.
Ripple and these other firms have already faced resistance from banking associations, which have cited risks associated with allowing crypto firms to engage in banking activities under a national trust charter.
Coinbase clarified that it has no intention of becoming a bank, while indicating that this move was simply to enable it to “confidently innovate” while ensuring proper oversight and security. The company also stated that the national trust charter would open up opportunities for them to launch new products beyond custody, including payments and related services.
The top crypto exchange has already declared its intention to become the “Everything Exchange” with plans to roll out prediction markets and tokenized equity offerings. It is worth noting that a national charter will subject the exchange to federal oversight. The company is currently operating under the supervision of the New York Department of Financial Services (NYDFS).
A Move To Integrate Crypto Into Traditional Finance
Coinbase stated that an OCC charter will streamline oversight for new offerings and enable continued innovation to integrate digital assets into traditional finance (TradFi). The exchange noted that while Congress is already working on the market structure bill, crypto is already woven into the fabric of the financial system, prompting this move.
Notably, the exchange’s CEO, Brian Armstrong, has been one of the most vocal voices in championing the push for the passage of the crypto market structure bill. He also recently criticized banks that are lobbying for the inclusion of yield prohibitions for crypto exchanges in the CLARITY Act.
The Coinbase CEO noted that these banks want to remove users’ ability to earn rewards when holding stablecoins. He further remarked that competition is good for consumers and these banks are “just mad that they’re losing.” He added that these big banks don’t need another bailout but better products.
Source: https://coingape.com/coinbase-joins-ripple-and-circle-in-applying-for-national-banking-license/
