In a significant move aimed at bolstering its financial service offerings without transitioning into a full-fledged bank, Coinbase has applied for a national trust charter with the U.S. Office of the Comptroller of the Currency (OCC). This application, announced on Friday, represents the cryptocurrency exchange’s effort to bring its operations under federal regulatory oversight, enhancing its capacity to offer innovative financial services across the United States.
A Strategic Move for Regulatory Clarity
Coinbase’s decision to pursue a national trust charter marks a pivotal moment in its growth strategy. By obtaining this charter, Coinbase aims to expand its existing custody services to include payments and settlements, all while maintaining its status as a non-bank entity. Greg Tusar, Vice President of Institutional Product at Coinbase, emphasized in a blog post, “Coinbase has no intention of becoming a bank. It’s our firm belief that clear rules and the trust of our regulators and customers enable Coinbase to confidently innovate while ensuring proper oversight and security.”
Currently, the company operates its main regulated custody service through Coinbase Custody Trust Company (CCTC), which is governed by New York state’s BitLicense framework. Introduced in 2015, the BitLicense was one of the first state-level regulatory models for cryptocurrency in the U.S., setting a precedent for other states to follow. However, securing a federal trust charter would allow Coinbase to circumvent the cumbersome process of state-by-state approvals, providing a more streamlined path to launching new financial services like crypto payments.
Aligning with Industry Trends
Coinbase’s application for a national trust charter is part of a broader trend among cryptocurrency firms seeking federal oversight. This year alone has seen major players like Circle, Ripple, and Paxos make similar moves. The pursuit of federal supervision is widely seen as a way to provide these companies with more latitude in their operations while ensuring compliance with U.S. regulations.
The push for federal charters comes amid increasing scrutiny from regulators, who are eager to establish clearer guidelines for the rapidly evolving cryptocurrency market. The U.S. Securities and Exchange Commission (SEC) has also been taking steps to expand the universe of crypto custody, potentially including state trusts, which could further reshape how digital assets are regulated and managed.
Balancing Innovation and Regulation
Coinbase’s application reflects its commitment to maintaining a delicate balance between innovation and regulation. By aligning with federal standards, the company hopes to foster trust with both regulators and customers, ensuring its services are both cutting-edge and secure. This approach is crucial as the cryptocurrency industry continues to grapple with concerns over security, fraud, and market manipulation.
Critics, however, argue that increased federal oversight might stifle innovation by imposing additional regulatory burdens. They warn that such regulations could limit the agility of companies to adapt to the rapidly changing landscape of digital finance. Nevertheless, proponents of federal charters contend that a unified regulatory framework is essential for the industry’s long-term viability and growth. They argue that it provides much-needed clarity and consistency across different jurisdictions, which is particularly important for multinational companies like Coinbase.
Looking Ahead: Opportunities and Challenges
As Coinbase awaits a decision on its application, the company remains optimistic about the opportunities a national trust charter could unlock. With federal approval, Coinbase would be better positioned to introduce new services that cater to a broader audience, potentially including retail and institutional investors who are increasingly looking to diversify their portfolios with digital assets.
Moreover, a national charter could enhance Coinbase’s competitiveness on a global scale. By setting a precedent for other U.S.-based crypto firms, Coinbase could lead the way in establishing a more robust and reliable framework for digital asset management worldwide.
Yet, the path forward is not without its challenges. Navigating the complexities of federal regulation requires significant resources and expertise. Coinbase will need to work closely with regulators to ensure compliance while continuing to drive innovation in its service offerings. Additionally, the company must remain vigilant in its efforts to educate both regulators and the public about the potential benefits and risks associated with cryptocurrency.
As the digital asset landscape continues to evolve, Coinbase’s application for a national trust charter underscores the importance of regulatory clarity in fostering trust and confidence in the cryptocurrency market. Regardless of the outcome, this move represents a strategic step towards a more regulated and secure future for digital finance.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
