Coinbase Global Inc. is calling on US banking regulators to amend or clarify existing policies to enable banks to offer cryptocurrency custody and trading execution services.
The largest US-based crypto exchange argues that current regulations prevent banks from entering the digital asset space and partnering with firms like Coinbase, Bloomberg reported.
A Request to Remove Restrictions on Banks for Crypto Services
In a letter sent to the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board of Governors, and the Federal Deposit Insurance Corporation (FDIC), Coinbase urged regulators to remove barriers that restrict banks from engaging in crypto-related activities.
The company specifically asked the OCC to withdraw an interpretive letter that Coinbase claims creates unnecessary hurdles for banks interested in digital assets.
Additionally, the exchange requested that the Fed and FDIC confirm that state-chartered banks under their jurisdiction are permitted to provide custody and execution services for cryptocurrencies, either directly or through third-party partnerships.
Legal Backing for Banks Entering Crypto
In a separate letter, three law firms representing Coinbase argued that existing federal laws already authorize banks to offer crypto services. According to these firms, regulators simply need to confirm that banks have the legal right to provide digital asset custody and engage with service providers like Coinbase.
The OCC and FDIC declined to comment on the matter, while the Federal Reserve did not respond to requests for a statement.
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Coinbase’s Push for Clearer Regulations
Coinbase’s Chief Policy Officer, Faryar Shirzad, emphasized the need for regulatory clarity, stating that banks should be allowed to partner with third-party providers to offer trading and exchange services.
He pointed out that Coinbase already provides custody services for most US-based spot Bitcoin and Ether ETFs, which debuted last year.
Historically, banks have faced significant regulatory scrutiny over crypto services. Between March 2022 and May 2023, the FDIC sent letters to several financial institutions under its supervision, advising them to pause or limit their crypto-related activities.
The regulatory environment created uncertainty, discouraging banks from fully engaging with the digital asset industry.
However, under the administration of President Donald Trump, barriers to bank participation in crypto are starting to fall. Trump has appointed crypto-friendly officials to key regulatory positions and issued an executive order supporting the digital asset industry.
One of the most significant changes was the repeal of SEC guidance known as SAB 121. This rule had previously forced banks to treat custodial crypto assets as liabilities on their balance sheets, making it impractical for them to offer custody services.
Coinbase Advocates for a Stronger Crypto Ecosystem
Coinbase has long been vocal about the challenges crypto companies face in securing and maintaining banking relationships.
The company’s latest letter to regulators comes just ahead of a Senate Banking, Housing, and Urban Affairs Committee hearing on “debanking,” a term referring to the exclusion of certain industries from traditional financial services.
“At Coinbase, we strongly believe that a comprehensive financial ecosystem is essential for the growth of the crypto economy,” Shirzad said. “That’s why we have been so active on banking issues, even though many of these regulatory fixes primarily benefit the banks. We see broad participation in the crypto economy as a positive development.”
Even as Coinbase advocates for regulatory changes, it faces growing concerns over security vulnerabilities on its platform. Blockchain investigator ZachXBT has publicly called on Coinbase to address a series of social engineering scams that reportedly led to users losing millions of dollars between December 2024 and January 2025.
As Coinbase continues its push for clearer regulatory guidelines, the debate over banking access to digital assets remains a critical issue.
Also Read: UK’s Financial Regulator Gives Green Light to Coinbase’s Crypto Operations