Does Coinbase Want To Become a Bank?

Coinbase, the largest US-based exchange, has filed an application with the Office of the Comptroller of the Currency (OCC) for a National Trust Charter (NTC). The move represents a significant step toward deepening its integration into the US financial system.

In an October 3 announcement, Coinbase described the NTC as a natural extension of its institutional custody business, which already secures billions of dollars in client assets.

Why Coinbase Applied for a Federal Trust Banking License

The new charter would empower the company to broaden its offerings beyond custody into payments and other trust-based financial services.

“If approved, the charter would continue to open up opportunities for Coinbase to launch new products beyond custody, including payments and related services, with the confidence of regulatory clarity, fostering broader institutional adoption,” the firm explained.

Paul Grewal, Coinbase’s Chief Legal Officer, said the decision reflects the company’s growth and the need for consistency at the national level.

“State-level charters and certifications have been instrumental as our business and the industry grew. But with crypto playing a bigger role in our everyday lives, it’s time for the clarity, consistency, and opportunity a federal-level charter affords,” he noted.

Grewal furthered that federal recognition would extend the protections Coinbase customers already enjoy under the New York Department of Financial Services (NYDFS).

According to him, the framework would ensure that users across the country receive the same level of legal and regulatory safeguards.

Meanwhile, Coinbase’s application mirrors a growing trend among major crypto companies seeking to align more closely with traditional banking regulations.

This year, several crypto firms, including Circle and Ripple, have also applied for similar charters, focusing on stablecoin issuance and payment infrastructure.

Their efforts reflect a broader regulatory shift across the United States. Over the past year, financial watchdogs have shown an increased willingness to integrate blockchain-based services into the mainstream financial system.

Clashes With Big Banks

Despite its federal ambitions, Coinbase maintains that it does not seek to become a bank.

Instead, it is mobilizing crypto users through its Stand With Crypto initiative. The campaign challenges what Coinbase views as the banking industry’s attempts to limit access to interest-bearing stablecoins.

In August, several banking associations warned regulators about the risks of allowing uninsured institutions to issue stablecoins. They argued that such a move could create regulatory loopholes and divert trillions from traditional bank deposits.

However, crypto advocates have pushed back against this, calling the warning a self-serving attempt to block competition.

Coinbase CEO Brian Armstrong described the financial institution’s actions as “hypocrisy ” and urged them to build better products.

“Hypocrisy from banks is causing problems for crypto again. Banks want to remove your ability to earn rewards when holding stablecoins. Competition is good for consumers. They’re just mad that they’re losing. Big banks don’t need another bailout, they need better products,” Armstrong stated.