Banking Association Cites Unproven Crypto Custody and Profitability Concerns
The Independent Community Bankers of America (ICBA) has voiced its opposition to cryptocurrency exchange Coinbase’s application for a National Trust Company Charter in the US. This move is seen as a significant development as Coinbase seeks to integrate more deeply into traditional finance, potentially impacting existing banking interests.
In a letter submitted to the US Office of the Comptroller of the Currency (OCC) on Monday, the ICBA stated its strong opposition to Coinbase's subsidiary's application for a trust charter. The association cited concerns regarding the "untested" aspects of crypto custody and raised doubts about Coinbase's ability to achieve and maintain profitability, particularly during periods of cryptocurrency market downturns.
Coinbase's chief legal officer, Paul Grewal, responded to the ICBA's stance in an X post on Tuesday. Grewal characterized the ICBA's position as opposing a regulated trust charter in favor of keeping crypto unregulated, suggesting it reflects an effort by bank lobbyists to create regulatory barriers to protect their existing market positions.
Coinbase initially applied for the national trust charter in October, aiming to facilitate a connection between the cryptocurrency economy and the traditional financial system. Reports indicated that the OCC's review process for such applications could span between 12 and 18 months.
The ICBA's letter urged the OCC to either deny Coinbase's application outright or to allow for an extended public review period. This review would cover the company's business plan and its broader implications from legal, prudential, and public interest perspectives.
Cointelegraph sought comment from the OCC regarding this matter but had not received a response by the time of publication.
Other Crypto Companies Pursue Banking Charters
While Coinbase has stated its intention is not to become a bank through this application, other prominent crypto companies, including Ripple Labs and Circle, have also applied for national bank charters. These applications follow the US government's establishment of a regulatory framework for payment stablecoins. Both Ripple and Circle have issued their own stablecoins: Ripple USD (RLUSD) and USDC, respectively.
The OCC's review of Ripple's application was scheduled to conclude the previous week. However, as of Tuesday, the government department had not made any public announcement regarding a decision. Ripple was contacted for comment but had not responded at the time of publication.

