The Independent Community Bankers of America (ICBA) is coming out against cryptocurrency exchange Coinbase’s application for a National Trust Company Charter in the US — a move that could threaten banks’ interests as the company moves closer to traditional finance.
In a Monday letter to the US Office of the Comptroller of the Currency (OCC) — the office responsible for approving banking applications — the ICBA said it “strongly opposes” Coinbase’s subsidiary applying for a trust charter. The letter cited “untested” elements related to crypto custody, as well as claims that Coinbase’s arm would “struggle to achieve and maintain profitability during crypto bear markets.”
“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. “That’s ICBA’s position. It’s another case of bank lobbyists trying to dig regulatory moats to protect their own.”
Coinbase applied for a national trust charter in October as part of its plans to “bridge the gap between the crypto economy and traditional financial system.” Reports suggested that the OCC could take between 12 and 18 months to review the crypto exchange’s application.
The ICBA letter urged the OCC to deny Coinbase’s application, or, alternatively, allow for more time for public review of the company’s business plan and the “legal, prudential, and public interest implications.”
Cointelegraph reached out to the OCC for comment, but had not received a response at the time of publication.
Crypto companies await notice from US regulators
Although Coinbase said it had “no intention of becoming a bank” through its application with the OCC, other crypto companies, such as Ripple Labs and Circle, have applied for national bank charters. The moves followed the US government passing legislation to establish a framework for payment stablecoins — both Ripple and Circle have issued their own stablecoins, Ripple USD (RLUSD) and USDC (USDC).
The OCC was scheduled to end its review of Ripple’s application last week, but as of Tuesday, the government department had not publicly announced any decision. Cointelegraph reached out to Ripple for comment, but had not received a response at the time of publication.