Coinbase Applies for National Trust Charter, Seeks Federal Oversight
In a move to expand its services and increase flexibility, 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 was submitted to the OCC, aims to bring Coinbase under federal regulatory oversight, allowing the firm to introduce new financial services without needing state-by-state approvals. This would enable Coinbase to build on its existing custody business by offering services such as payments and settlement, without seeking a full-service bank charter.
"We believe that a national trust charter will provide us with the flexibility we need to innovate and expand our services," said a spokesperson for Coinbase in an interview. "This is not about becoming a bank, but rather about being able to offer more financial services to our customers."
The OCC has yet to comment on the application, but industry experts say that if approved, it would be a significant development for the cryptocurrency sector.
"A national trust charter would allow Coinbase to operate under federal oversight, which would provide a level of consistency and clarity in regulation," said John Lee, a financial regulatory expert. "This could have far-reaching implications for the entire industry."
Background on the application process shows that Coinbase has been exploring this option for some time. The company has faced challenges in expanding its services due to state-by-state regulations, which can be complex and time-consuming.
The OCC's national trust charter would provide a more streamlined approach, allowing Coinbase to introduce new financial services without needing to navigate multiple regulatory frameworks.
If approved, the national trust charter would bring Coinbase under federal oversight, but it would not grant the company full banking powers. Instead, it would allow the firm to operate as a specialized financial institution, offering a range of services including custody, payments, and settlement.
The application process is expected to take several months, with industry experts predicting that a decision may be made by early next year.
As Coinbase continues to navigate this regulatory landscape, one thing is clear: the company's move towards federal oversight marks an important step forward for the cryptocurrency sector.
*Reporting by Coindesk.*
