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The Independent Community Bankers of America (ICBA) is expressing opposition to cryptocurrency exchange Coinbase’s pursuit of a National Trust Company Charter in the US — a step that might jeopardize banks’ interests as the firm inches closer to conventional finance.
In a Monday correspondence to the US Office of the Comptroller of the Currency (OCC) — the agency tasked with approving banking applications — the ICBA stated it “vehemently opposes” Coinbase’s subsidiary seeking a trust charter. The correspondence highlighted “unproven” aspects linked to crypto custody, as well as assertions that Coinbase’s branch would “find it challenging to attain and sustain profitability during crypto downturns.”
“Picture opposing a regulated trust charter because you wish crypto to remain… unchecked,” remarked Coinbase chief legal officer Paul Grewal in a Tuesday post on X. “That’s ICBA’s stance. It’s yet another instance of banking lobbyists attempting to construct regulatory barriers to safeguard their own interests.”
Coinbase submitted an application for a national trust charter in October as part of its initiative to “close the divide between the crypto economy and the traditional financial framework.” Reports indicated that the OCC could take anywhere from 12 to 18 months to assess the crypto exchange’s application.
Related: Nordic bank that previously distanced itself from crypto to soon introduce a Bitcoin ETP
The ICBA correspondence urged the OCC to reject Coinbase’s application, or, as an alternative, permit additional time for public scrutiny of the company’s business blueprint and the “legal, prudential, and public interest ramifications.”
Cointelegraph reached out to the OCC for feedback, but had not received a reply by the time of publication.
Crypto firms await updates from US regulators
Though Coinbase asserted it had “no plans to transform into a bank” via its application with the OCC, other crypto enterprises, like Ripple Labs and Circle, have requested national bank charters. These actions were prompted by the US government enacting legislation to establish a framework for payment stablecoins — both Ripple and Circle have launched their stablecoins, Ripple USD (RLUSD) and USDC (USDC).
The OCC was set to conclude its assessment of Ripple’s request last week, but as of Tuesday, the department had not publicly disclosed any verdict. Cointelegraph reached out to Ripple for commentary, but received no response by the time of publication.
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