Coinbase, the largest cryptocurrency exchange in the U.S., is venturing further into the realm of traditional finance. The company has recently applied for a National Trust Company Charter from the Office of the Comptroller of the Currency (OCC), signaling its ambitions to expand its offerings in the financial space.
It’s important to note that Coinbase has explicitly stated that it has no intention of becoming a bank with this move. Instead, the National Trust Company Charter would grant Coinbase more control over custody and payments, allowing the company to safeguard assets, manage stablecoin reserves, and settle payments more efficiently.
Greg Tusar, Coinbase’s VP of institutional product, emphasized that the license would streamline oversight for new offerings and enable continued innovation to integrate digital assets into traditional finance. This move is primarily about establishing credentials and regulatory clarity for Coinbase, rather than transforming into a full-fledged bank.
Payments and stablecoins are at the core of Coinbase’s strategy moving forward. The company has been focusing on payments, particularly with the rise of stablecoins like USDC. Coinbase’s close partnership with Circle to manage USDC has become central to its payment strategy. USDC is now the world’s second-largest stablecoin, and Coinbase has secured partnerships with major players like Shopify, PNC, and JPMorgan to drive adoption.
The political landscape also plays a significant role in Coinbase’s decision to pursue a trust charter. With President Donald Trump signing the first U.S. law regulating dollar-pegged stablecoins, the OCC now has authority over stablecoin regulations. By obtaining a trust charter, Coinbase aims to expand its payments and custody services under clearer federal guidelines.
Coinbase is not alone in seeking a National Trust Company Charter. Other companies like Circle, Ripple, Paxos, and Bitgo have also applied for the license this year. However, traditional banks are cautious about granting deposit-like powers under a trust charter, as it could potentially disrupt the banking industry.
With $425 billion in assets under custody and a 53% increase in stock value this year, Coinbase is already a dominant player in the crypto custodian market. A federal trust charter could further solidify its position and reduce its reliance on partner banks. CEO Brian Armstrong has positioned Coinbase as a “bank replacement,” offering a range of financial services without actually becoming a bank.
The OCC’s decision on Coinbase’s application will have far-reaching implications for the industry. If approved, it could set a precedent for how stablecoins and digital assets integrate into the U.S. financial system in the coming years. This move by Coinbase signifies a significant step towards bridging the gap between traditional finance and the world of cryptocurrencies.