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Coinbase received final approval from the Office of the Comptroller of the Currency (OCC) to charter Coinbase National Trust Company, the crypto exchange announced on Monday.
Earlier reporting: Coinbase states 99% of assets in cold storage after Binance breach.
Earlier reporting: XRP Coinbase Discount Shrinks to 0.006% After USDT Conversion.
As of 03:50 UTC, XRP traded at $1.09, -1.9% over 24 hours, with $2.3 billion in 24-hour volume.
The OCC approved the application the previous Friday, according to Coinbase. The new charter places the company’s institutional crypto custody business under a single federal regulator, building on its existing state-level authorization.
Federal Custody Framework
Coinbase stated that the charter allows it to expand its custody operations, which hold digital assets on behalf of institutional clients, within a federal regulatory framework. The company described custody as foundational to its business and positioned itself as the leading crypto custodian globally.
“Custody is foundational to our business,” Coinbase said in a statement. The company added that the federal charter will “bring clear and consistent federal uniformity” to its custody operations.
Coinbase CEO Brian Armstrong addressed the approval on social media on Monday. “Trusted custody is essential for bringing more of the financial system onchain,” Armstrong wrote. He described Coinbase National Trust Company as “another step for building that foundation.”
Coinbase has offered regulated custody services since 2018, when its subsidiary Coinbase Custody Trust Company won a limited purpose trust charter from the New York Department of Financial Services. The new national trust company builds on that state-level foundation while moving trust activities into a consistent federal framework, according to the company.
Charter Process and Scope
The final approval comes seven months after the OCC granted Coinbase conditional approval in April. At that time, the company clarified that it was not becoming a commercial bank. Coinbase stated it would not take retail deposits or engage in fractional reserve banking. The company first applied for the national charter the previous year.
Coinbase joins a growing list of crypto firms that have secured national trust charters this year. Circle won final approval in July for a trust bank intended to manage the reserves behind its USDC stablecoin. Ripple received final approval last month for a trust bank associated with its RLUSD stablecoin.
Several other firms are still awaiting final decisions. Jack Dorsey’s Block applied for a charter to custody Bitcoin in September. Kraken’s parent company, Payward, filed its own application in May. A trust company linked to World Liberty Financial, which is backed by the Trump family, won conditional approval in August for a charter tied to its USD1 stablecoin, according to Decrypt.
Regulatory Opposition
The wave of crypto charter approvals has drawn opposition from some lawmakers and banking groups. Sen. Elizabeth Warren (D-MA) has argued that the OCC’s crypto charter approvals, including Coinbase’s, are illegal. The Independent Community Bankers of America has sued the OCC in an effort to stop crypto firms from entering the banking sector. The group described the entry as a “side door” into banking.
Source: Decrypt
