ICBA Opposes Coinbase’s National Trust Company Charter Bid
The Independent Community Bankers of America (ICBA) has voiced strong opposition to Coinbase’s recent bid for a National Trust Company Charter, expressing concerns that the move could jeopardize the interests of traditional banks as the cryptocurrency platform seeks to integrate more closely with conventional financial systems.
Concerns Over Cryptocurrency Custody
In a letter sent to the U.S. Office of the Comptroller of the Currency (OCC) on Monday, the ICBA stated its firm disapproval of the application made by Coinbase’s subsidiary, emphasizing the risks associated with the ‘untested’ aspects of cryptocurrency custody. The organization also noted that Coinbase’s venture may struggle to sustain profitability amid adverse market conditions for cryptocurrencies.
Coinbase’s Response
In response, Coinbase’s chief legal officer, Paul Grewal, took to social media on Tuesday to criticize the ICBA’s stance, framing it as an effort to maintain an unregulated environment for cryptocurrencies. Grewal questioned the rationale behind opposing a regulated trust charter, suggesting that such a position reflects the interests of bank lobbyists aiming to protect their market share.
Application Process and Broader Implications
Coinbase initiated its application for a national trust charter in October, highlighting its goal to create a link between the cryptocurrency sector and traditional financial infrastructures. Reports indicate that the OCC could require 12 to 18 months to process this application. The ICBA’s correspondence further requested either a rejection of the application or an extension to allow for greater public scrutiny regarding Coinbase’s business model and its broader legal and economic implications.
Other Cryptocurrency Firms Seeking Charters
As the regulatory landscape evolves, other cryptocurrency firms, including Ripple Labs and Circle, have also pursued national bank charters following recent U.S. legislation aimed at providing a regulatory framework for payment stablecoins—products both Ripple and Circle have developed.
Pending Decisions
While the OCC was set to conclude its evaluation of Ripple’s application last week, as of Tuesday, no official decision had been disclosed. Cointelegraph reached out to Ripple for additional insights but had not received a reply at the time of this report.
