Coinbase Granted Conditional OCC National Trust Bank Charter

Coinbase has received conditional approval from the Office of the Comptroller of the Currency (OCC) to charter Coinbase National Trust Company, a national trust bank.

What's the Scoop?

• Conditional Approval: The OCC – a major U.S. banking system regulator – has granted crypto exchange Coinbase a conditional national trust banking charter. Per its announcement, the crypto exchange does not plan on converting into a full-service commercial bank and will not engage in fractional reserve lending (a prohibited activity for trust bank charter holders).
• Payments Expansion: According to a press release on the matter, "Conditional approval means that Coinbase is positioned to build the next chapter of finance with the regulatory confidence that our partners, customers, and the broader market need." Coinbase Chief Legal Officer Paul Grewal elaborated on future plans, telling CNBC that approval will empower the exchange to operate payment products, in addition to its custody business, under federal supervision.
• Industry Outcry: Coinbase's latest achievement does not come unopposed. Several banking industry lobby groups have critized the charter approval – including the Independent Community Bankers of America, Bank Policy Institute, and National Community Reinvestment Coalition – which have all published statements to such effect, voicing concern about whether the bank's proposed activities are consistent with federal law.