ICBA Opposes OCC’s Conditional Nod For Coinbase National Trust Bank Charter

The Office of the Comptroller of the Currency (OCC) granted Coinbase (COIN) a conditional approval for a national trust bank charter, a move that would place the crypto exchange among a small group of five digital-asset firms — including Ripple, Circle (CRCL) — that have received similar tentative sign-offs from the agency. 

If the charter is finalized, Coinbase would be able to expand beyond custody services to offer payment products and other infrastructure under federal supervision, Coinbase’s chief legal officer, Paul Grewal, told CNBC.

During his interview, Grewal said that the approval opens the door for Coinbase to develop a broader range of services in the US, particularly in the area of payments: 

Over the long haul we will be able to explore, with the OCC, offering not just custody products but also other infrastructure products, particularly around payments, that we think will expand and extend crypto payments in all sorts of new and interesting and important directions. 

However, the decision has reignited criticism from traditional banking stakeholders. The Independent Community Bankers of America (ICBA) responded with a letter opposing the OCC’s conditional approval of Coinbase National Trust Co., the subsidiary named in the application. 

ICBA President and CEO Rebeca Romero Rainey called the approval “a grave mistake” that, in the group’s view, would put US consumers at risk. 

The ICBA’s letter alleges the application contains significant shortcomings — including inadequate risk controls, unclear profitability prospects, and unresolved resolution risks — and argues that Coinbase’s filing fails to satisfy requirements set by the National Bank Act and the OCC’s own regulations.

The trade group warned that the influx of charter applications from non-bank entities suggests firms are seeking the benefits of a federal bank charter without being subject to the full spectrum of bank regulatory safeguards. 

That, the Independent Community Bankers of America alleges, could undermine consumer protection and threaten the broader stability of the financial system. Moreover, the ICBA also aimed at the OCC’s final rule on national trust bank chartering. 

The trade group objects to the OCC’s plan to charter uninsured national trust banks that could carry out non‑fiduciary crypto-related business without being subject to the Bank Holding Company Act or the prudential requirements that apply to FDIC‑insured institutions. 

In its letter, ICBA reiterated calls for the OCC to withdraw the rule or reissue a revised proposal that aligns with the agency’s statutory authority and longstanding legal precedent.

Despite the OCC’s conditional approval, Coinbase’s stock, which trades under the ticker name COIN, was trading at $171 at the time of writing and had seen little to no change compared to Wednesday’s trading session. 

Featured image from OpenArt, chart from TradingView.com