The latest move by US regulators toward a coinbase bank charter is drawing sharp criticism from traditional banking groups even as the exchange eyes new services.
Summary
OCC’s conditional green light for Coinbase trust bank
The US Office of the Comptroller of the Currency (OCC) has granted Coinbase (COIN) a conditional approval for a national trust bank charter. This tentative nod would place the crypto exchange among a small group of just five digital-asset firms, including Ripple and Circle, that have received similar preliminary sign-offs from the agency.
If the charter is ultimately finalized, Coinbase would be able to expand beyond its existing crypto custody services. The company could then offer payment products and additional infrastructure under direct federal supervision, Coinbase chief legal officer Paul Grewal told CNBC. However, that potential expansion is already facing organized resistance from community banks.
Coinbase targets expanded US payments and infrastructure
During his interview, Grewal argued that the OCC decision opens the door for Coinbase to develop a broader range of services in the US, especially in payments. He said the approval allows the exchange to work with the regulator on a new generation of payment-focused offerings.
According to Grewal, the conditional approval for the coinbase bank charter means that, over the long haul, the company can explore offering not only custody products but also other infrastructure products. Moreover, he emphasized that the focus would be particularly around payments that could expand and extend crypto payments in new directions across the US market.
ICBA slams OCC decision and flags regulatory gaps
The move has reignited long-standing banking regulation concerns from traditional institutions. The Independent Community Bankers of America (ICBA) responded with a detailed letter opposing the OCC’s conditional approval of Coinbase National Trust Co., the subsidiary named in the charter application. That said, the OCC has not yet granted full approval.
Rebeca Romero Rainey, ICBA president and CEO, labeled the approval “a grave mistake” that she says would put US consumers at risk. The ICBA letter alleges that Coinbase’s application contains significant shortcomings, including inadequate risk controls, unclear profitability prospects and unresolved resolution risks that could surface during stress events.
The trade group further argues that the filing fails to satisfy the requirements set by the National Bank Act and the OCC’s own regulations. Moreover, it claims these gaps highlight why regulators must apply consistent standards across both traditional banks and emerging digital-asset firms.
Community banks challenge OCC’s charter framework
The ICBA warned that the influx of charter applications from non-bank entities suggests many firms are seeking the benefits of a federal bank charter without being fully subject to the usual safeguards. This includes capital, liquidity and supervisory frameworks that apply to conventional banks. However, community banks say this creates an uneven playing field.
According to the ICBA, that dynamic could undermine consumer protection and threaten the broader stability of the financial system. The group also targeted the OCC‘s final rule on national trust bank chartering, arguing that the framework needs to be reworked to reflect the full scope of risks tied to crypto-related activities.
The trade association specifically 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. Moreover, ICBA said this approach could allow complex operations to grow outside established oversight regimes.
ICBA urges OCC to withdraw or revise charter rule
In its letter, the ICBA reiterated calls for the OCC to withdraw its current rule or reissue a revised proposal that better aligns with the agency’s statutory authority and longstanding legal precedent. The independent community bankers group stressed that national trust institutions should not be used as a workaround to avoid the full regulatory framework that applies to traditional banks.
The ICBA also argued that the OCC should conduct a broader review of how its chartering policies intersect with emerging digital-asset business models. That said, it signaled a willingness to engage with regulators on clearer guardrails that balance innovation with consumer protection and systemic stability.
Market reaction and outlook for Coinbase
Despite the OCC’s conditional approval and the policy backlash, Coinbase stock, which trades under the ticker COIN, showed little immediate reaction. As of the time of writing, COIN was trading at $171 and had seen little to no change compared to Wednesday’s trading session.
Looking ahead, the key question for Coinbase will be how quickly it can move from conditional status to a finalized charter while addressing regulatory concerns around coinbase payment products and other services. The outcome will shape how far the company can push into US payments and infrastructure under federal oversight.
In summary, the OCC’s conditional nod has opened a potential new chapter for Coinbase’s regulated expansion, but the strong opposition from ICBA and other banking voices ensures that the path to a full national trust bank charter will remain closely watched across Washington and Wall Street.
