Coinbase Applies for Federal Trust Charter, Aiming to Expand Services Under Federal Oversight
In a move that could significantly expand its services, Coinbase has applied for a national trust charter with the U.S. Office of the Comptroller of the Currency (OCC), according to an announcement made by the company on Friday.
The application, which is pending approval, would place Coinbase under federal regulatory oversight and provide more flexibility for the firm to offer new financial services without needing state-by-state approvals. This could enable Coinbase to introduce services such as payments and settlement, building on its existing custody business.
"We believe that a national trust charter will allow us to continue innovating and expanding our services in a way that is consistent with our mission of providing secure and reliable financial infrastructure," said a spokesperson for Coinbase in an email statement. "We are excited about the potential benefits this could bring to our customers and the broader market."
The application comes as part of a larger trend of fintech companies seeking federal oversight, which can provide more stability and clarity than state-by-state approvals. A national trust charter would allow Coinbase to operate under a single set of rules, rather than navigating multiple regulatory frameworks.
Background on the issue shows that Coinbase has been expanding its services in recent years, including the introduction of a payment service called "Coinbase Pay" earlier this year. However, the company has faced challenges from state regulators who have sought to impose their own requirements on the firm's operations.
Industry experts say that the application is significant because it could pave the way for other fintech companies to follow suit and seek federal oversight. "This is a major development in the evolution of the fintech industry," said David Schwartz, a financial services expert at the law firm Perkins Coie. "If Coinbase is successful in obtaining a national trust charter, it will likely set a precedent for other firms to follow."
The application is currently pending review by the OCC, which has not provided a timeline for when a decision may be made. If approved, the charter would provide Coinbase with more flexibility to innovate and expand its services, potentially leading to new opportunities for customers and investors.
In conclusion, Coinbase's application for a national trust charter marks an important step forward in the company's efforts to expand its services under federal oversight. As the fintech industry continues to evolve, this development could have significant implications for the future of financial services.
*Reporting by Coindesk.*
