Bank trade group opposes Coinbase charter application

• Key insight: Industry regulation debates could impact crypto custodians like Coinbase seeking trust charters.
• Expert quote: Comptroller Jonathan Gould argues that bringing compliant fintechs into banking is essential for oversight.
• Supporting info: Coinbase filed for charter Oct 3; Anchorage Digital remains the only crypto firm approved (Jan 2021).
  Source: Bullets generated by AI with editorial review

The Independent Community Bankers of America filed a letter to the Office of the Comptroller of the Currency on Tuesday opposing Coinbase's application for a national trust bank charter.

The letter claims that the Coinbase National Trust Company's application "fails to meet the requirements for approval of a national bank charter under the National Bank Act (NBA) and the OCC's own regulations and standards."

The ICBA, which represents smaller financial institutions across the U.S., argued that the CNTC subsidiary would "struggle to achieve and maintain profitability during crypto bear markets."

"Coinbase would be less able to provide financial support to its subsidiary during these periods because its parent revenue is tied to the same crypto market conditions that would stress CNTC," the letter said. 

The firm would also be at risk of internal risks during bear markets that would require the support Coinbase wouldn't be able to provide, according to the ICBA.

"Operational incidents, like Coinbase's May 2025 cybersecurity breach, often increase during stress periods, creating immediate costs for remediation, system upgrades, and monitoring programs," the letter said.

The ICBA noted that this should be of particular concern to the OCC because the agency's "untested receivership framework" could struggle to resolve an uninsured institution of Coinbase's size and complexity as a cryptocurrency and ETF custodian.

Coinbase's filing, submitted on October 3, marks the latest instance in a growing wave of crypto-related trust charter applications including Circle, Ripple and Paxos. Anchorage Digital is so far the only crypto firm to have received OCC approval for a national trust bank charter, which was granted in January 2021.

Coinbase is primarily a crypto exchange platform and partnered with traditional banks such as JPMorganChase and PNC for digital wallet offerings earlier this year. The firm has also launched its own co-branded credit card with crypto rewards through American Express and is building a protocol with CloudFlare for agentic AI-powered payments.

Banks have generally opposed the recent rise of crypto trust charter applications, with multiple bank trade groups writing letters to the OCC over the last several months requesting either rejections or additional scrutiny for the group of crypto trust filings that the OCC is currently considering.

Comptroller of the Currency Jonathan Gould defended bringing compliant fintechs, including crypto exchanges, into the regulated banking system on Tuesday. He called it "the only way" to level the playing field between banks and challenger fintech firms.

"I have no ability to supervise or regulate nonbanks," Gould said in a fireside chat at The Clearing House's annual conference. "The only way I can possibly ensure a level playing field is for those who voluntarily come into the system. If they meet our statutory standards and our supervisory expectations, that's literally the condition preceding before I can even attempt to put them on a level playing field."

Gould argued that the OCC's only mechanism to ensure oversight of fintechs and other non-banks is to admit qualifying firms into the chartered banking system under existing law. "We have the statutory factors that we have, and it's our job to apply those based on the facts presented to us in an application," he said.

The ICBA letter also pushed back against the OCC's legal standing to consider Coinbase's application. The letter claims that the filing hinges on the OCC's Interpretive Letter 1176, which "purports to authorize national trust banks to engage in non-fiduciary activities beyond those permitted under 12 U.S.C. § 92a." 

However, the ICBA letter claims that "IL 1176 was issued without the public notice and comment procedures required by the Administrative Procedure Act and therefore is not legally valid. The OCC cannot lawfully approve activities based on an interpretive letter that violates the APA."