Coinbase is considering applying for a federal bank charter, a company spokesperson confirmed, as cryptocurrency firms seek to capitalize on regulatory amiability.
“This is something Coinbase is actively considering but has not made any formal decisions yet,” the spokesperson told Banking Dive, without elaboration.
Coinbase is one of four crypto companies identified by the Wall Street Journal Monday as currently planning to seek a bank charter, alongside crypto custodian BitGo and stablecoin issuers Circle and Paxos.
Spokespeople for Paxos, Circle and BitGo declined to comment.
Just one crypto-native bank has a federal bank charter: Anchorage Digital scored a national trust charter from the Office of the Comptroller of the Currency in 2021. Paxos and a third firm, Protego, received conditional OCC charters that year, too, though the charters expired in 2023 before the firms were able to meet the charters’ conditions.
But that’s “highly” likely to change, according to Adam Shapiro, partner and co-founder at financial services advisory and investment firm Klaros Group, “based on the noises coming out of the OCC, if [crypto companies] submit credible applications.”
The main regulatory shift needed to clear the way for crypto firms to obtain bank charters already happened last month, Shapiro said: The OCC rescinded a Biden-era requirement that banks obtain supervisory non-objection before engaging in crypto-related activities, which was “obviously a big deterrent to being able to do anything new,” Shapiro said.
One benefit crypto firms would see after obtaining a bank charter, Shapiro said, is direct access to the payments system.
“It puts control of the on and off ramp in the hands of the crypto companies themselves, without having to go through intermediate banks. With some of the challenges with getting banking relationships in this space, you can see why that’s attractive, even for firms like Coinbase that have been large and stable enough to maintain a range of banking partners,” Shapiro said.
Also, a federal charter would simplify regulatory compliance for crypto firms that are otherwise state-chartered.
“States have been very welcoming of innovative activity and bringing that within a regulated framework, and at times where the federal pendulum has strongly swung to more regulation and gatekeeping, that’s given the crypto industry a way to develop,” Shapiro said.
But there are disadvantages to state regulation, “not least the need, in many cases, to maintain multiple charters,” Shapiro said. Not all states recognize reciprocity for state trusts, he said, and crypto firms with money transmitter licenses have multiple exams each year covering much of the same ground.
A federal charter would cut down on duplicative requirements.
Current and likely-incoming OCC leadership have long been pro-crypto.
As chairman of the National Credit Union Administration in 2021, current Acting Comptroller Rodney Hood said that the crypto market was “something vitally important … [to] the overall financial services market,” according to CU Today. And Jonathan Gould, whose confirmation as comptroller awaits a full Senate vote, was the OCC’s chief counsel when it granted charters to Anchorage, Paxos and Protego.
Anchorage Digital CEO and co-founder Nathan McCauley told Banking Dive that the firm has “worked hand-in-hand with the OCC over the last four years to pioneer a path forward for federally regulated crypto banking.”
He called the regulatory clarity that comes with an OCC charter “second to none.”
“At the end of the day, we think there should be more federally chartered digital asset banks — and we would be proud for others to follow in our footsteps,” McCauley said. “Institutions, consumers, and the ecosystem as a whole would be better for it.”
