Coinbase Seeks National Trust Charter, Denies Banking Ambitions

  • Coinbase has applied for a US National Trust Company Charter to expand regulated services.
  • The company insists it does not intend to become a bank despite the new license.
  • Other firms like Circle and Ripple have also recently sought similar trust charters.
Coinbase Seeks National Trust Charter, Denies Banking Ambitions
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Coinbase has formally submitted an application for a National Trust Company Charter with the US Office of the Comptroller of the Currency (OCC), joining other major digital asset firms seeking similar regulatory status.

Coinbase’s strategic move

The exchange stated that the application marks a step toward expanding its business and regulatory oversight in the US.

According to Coinbase, this move is part of a broader effort to:

“bridge the gap between the bitcoin economy and the traditional financial system.”

In a statement, Coinbase clarified its intentions:

“Coinbase has no intention of becoming a bank. It is 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.”

License unlocks new services

Luke Youngblood, a former Coinbase engineer, explained on a recent podcast that obtaining the trust charter would enable the company to offer “built-in on-ramp, off-ramp” features, eliminating the need for third-party partner banks.

Approval would also allow Coinbase to expand beyond custody into payment solutions and other regulated offerings.

Brendan Pedersen, a political commentator, noted that while trusts are typically more limited in their business activities compared to banks, “the distinction has blurred over the years.”

Product improvements noted

Youngblood also commented on the evolution of Coinbase’s retail app since he left in 2022, noting significant improvements and the hiring of top engineering talent:

“When I worked there back in 2022, before I left, it was not that great. The features, like the Coinbase debit card, didn’t work very well,” he said.

Industry trend: more trust charter applications

Coinbase’s application follows similar moves by other digital asset companies.

Stablecoin issuer Circle recently filed for a national trust bank license, and Ripple Labs submitted its own application shortly after.

Original Article