Coinbase goes after National Trust Charter — But don’t call it a bank

Crypto exchange Coinbase has applied for a National Trust Company Charter with the Office of the Comptroller of the Currency (OCC), joining a growing number of US-based crypto companies pursuing the same license.

“Coinbase is taking a significant step in expanding our business capabilities and regulatory oversight beyond the existing framework, paving the way for innovation and growth in building a modern financial system powered by digital assets,” Coinbase said in a statement on Friday.

Coinbase pursues the license to “bridge the gap” with TradFi

According to Coinbase, pursuing the license is part of its strategy “to bridge the gap between the crypto economy and traditional financial system.” However, it has no interest in changing the core focus of its operations:

“Coinbase has no intention of becoming a bank. It is our firm belief that clear rules and the trust of our regulators and customers enable Coinbase to confidently innovate while ensuring proper oversight and security.”

Luke Youngblood, a former Coinbase employee who led the creation of Coinbase staking rewards, explained in a podcast published on Friday that the license would enable Coinbase to “offer basically built-in on-ramp, off-ramp, and no longer have to use partner banks on-ramps, off-ramps.”

Coinbase said that approval of the license would allow the exchange to expand beyond custody services, opening the door to payments and other related offerings under clearer regulatory guidance.

However, political commentator Brendan Pedersen added, “Trusts theoretically have more limitations than other types of banks when it comes to business activities, but the distinction has blurred over the years.”

Former Coinbase exec notes app improvement

Youngblood said the Coinbase retail application has improved significantly since he stopped working at the exchange in 2022. “When I worked there back in 2022, before I left, it was not that great. The features, like the Coinbase debit card, didn’t work very well,” Youngblood said.

“You can really tell they’ve hired some top engineering talent,” Youngblood said.

Related: AI agents need crypto to operate in financial markets: Coinbase exec

It comes as several other crypto companies have also recently applied for the National Trust Charter.

On July 1, stablecoin issuer Circle applied to establish a national trust bank in the US. A couple of days later, Ripple Labs applied for the same license. 

Ripple Labs CEO Brad Garlinghouse said if the license is approved, it would be a “new (and unique!) benchmark for trust in the stablecoin market”

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