Building Trust Through Regulation
Coinbase confirmed it does not plan to become a full-service bank. “It is our firm belief that clear rules and the trust of our regulators and customers enable Coinbase to innovate confidently,” the company stated. The firm said the charter would also open opportunities to launch new products beyond custody, including payments and institutional services, supported by regulatory clarity.
Luke Youngblood, a former Coinbase employee who helped create the exchange’s staking rewards program, said the license could transform Coinbase’s infrastructure. Speaking on a podcast, he explained it would allow Coinbase to manage direct “on-ramps and off-ramps” without relying on partner banks. That development could streamline user transactions and strengthen Coinbase’s operational independence.
Meanwhile, financial commentator Brendan Pedersen noted that trust charters traditionally have more restrictions than banks. Yet, he said, “the distinction has blurred over the years.” His observation highlights an evolving regulatory environment in which digital finance entities are increasingly overlapping with banking operations.
Related: Whale Moves $171M in Solana to Coinbase Institutional: Exit or Adoption?
This step mirrors actions taken by Circle, Paxos, and Ripple, all of which are pursuing similar federal trust charters. Circle, the issuer of the USDC stablecoin, has proposed its “First National Digital Currency Bank, N.A.” Paxos already holds a state charter but is seeking federal recognition to expand operations. Ripple has followed suit, aligning its payment infrastructure under the supervision of the OCC. Together, these moves show a coordinated push by the crypto industry to achieve legitimacy within U.S. regulatory frameworks.
Expanding Institutional Integration
Based in San Francisco, Coinbase is also deepening ties with traditional finance. In July, it signed a partnership with JPMorgan Chase to enhance the efficiency of crypto purchasing for customers. The company, which went public in 2021, also manages seized digital assets for the U.S. Marshals Service under the Department of Justice.
Coinbase’s custody division already operates as a limited-purpose trust company under the jurisdiction of the New York Department of Financial Services. However, that framework requires compliance across multiple states. The OCC charter would streamline oversight under a single federal standard.
What does this mean for the broader crypto sector? If approved, the charter could become a new model for how U.S. crypto firms align innovation with compliance. It may also create a path for regulatory harmonization, reducing operational fragmentation across states.
As global scrutiny of digital assets intensifies, Coinbase’s move reflects a changing era in financial governance one in which crypto firms seek legitimacy not through rebellion, but through regulation.