The cryptocurrency exchange Coinbase’s application for a National Trust business Charter in the US is being opposed by the Independent Community Bankers of America (ICBA). This move might jeopardise banks’ interests as the business approaches traditional banking.
Coinbase hits back
The ICBA stated that it “strongly opposes” Coinbase’s subsidiary’s application for a trust charter in a letter sent on Monday to the US Office of the Comptroller of the Currency (OCC), which is in charge of reviewing banking applications.
The letter stated that Coinbase’s arm will “struggle to achieve and maintain profitability during crypto bear markets” and mentioned “untested” aspects of coin custody.
“Imagine opposing a regulated trust charter because you prefer crypto to stay… unregulated,” said Coinbase chief legal officer Paul Grewal in a Tuesday X post. He added, “That’s ICBA’s position. It’s another case of bank lobbyists trying to dig regulatory moats to protect their own.”
Also Read: Coinbase Applies For National Trust Company Charter In The US
In an effort to “bridge the gap between the crypto economy and traditional financial system,” Coinbase applied for a national trust charter in October. According to reports, it may take the OCC 12 to 18 months to consider the application from the cryptocurrency exchange.
What comes next?
The ICBA letter asked the OCC to either reject Coinbase’s application or give the public more time to examine the company’s business model and the “legal, prudential, and public interest implications.”
Other cryptocurrency startups, such as Ripple Labs and Circle, have filed for national bank licenses, despite Coinbase’s statement that it had “no intention of becoming a bank” in its application with the OCC.
Both Ripple and Circle have released their own stablecoins, RLUSD and USDC. The actions came after the US government passed laws to provide a framework for payment stablecoins.
Other developments
The latter stages of talks to acquire the stablecoin infrastructure company BVNK by Coinbase have started. On October 31, it was disclosed that Coinbase is now looking into BVNK, with an estimated $2 billion purchase price.
According to those with knowledge of the negotiations, Coinbase appears to be ahead of Mastercard at this point. If the agreement is approved, it would be one of the largest developments in stablecoin payments to date.
The OCC may take up to 18 months to consider Coinbase’s application. Coinbase is still working to close the gap between traditional finance and cryptocurrency, even though the decision is still pending. The cryptocurrency exchange has demonstrated its dedication to upholding legal requirements and encouraging innovation in the financial industry.
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