Coinbase’s push to secure a national trust charter is reportedly facing huge roadblocks from one of the most powerful bank lobbying groups in Washington. The Independent Community Bankers of America (ICBA) moved ahead to urge the US Office of the Comptroller of the Currency to deny the exchange’s application.
The US’s biggest crypto exchange had applied for a national trust bank charter for its subsidiary, Coinbase National Trust Co. ICBA had argued that granting the charter would “set a dangerous precedent”. It added that the company’s business model remains “untested” in periods of prolonged market stress.
Grewal slams ICBA for “Regulatory Moats”
Coinbase’s chief legal officer, Paul Grewal, didn’t leave the response unnoticed and called the ICBA’s position a clear case of protectionism, not consumer protection. In an X post, he stated that imagine opposing a regulated trust charter because you prefer crypto to stay unregulated. Grewal mentioned that this is bank lobbyists trying to build regulatory moats.
The ICBA’s letter is trying to reflect growing concern among regional banks. It suggests that crypto-native firms are inching closer to traditional financial turf. If this gets approved, then the charter would allow Coinbase to offer custody, payments, and settlement services. This will come directly under federal oversight. However, it may allow that exchange to bypass some state-by-state regulatory constraints.
Coinbase has highlighted that this is not an attempt to become a bank. It had stated that its existing Coinbase Custody Trust Company will remain regulated by the New York Department of Financial Services. The exchange urges that the national charter would simply provide broader clarity. However, it will also help institutional clients to operate under a federally recognized regulatory framework.
The US’s biggest crypto exchange is not alone in the race, as Circle and Paxos have sought national trust charters. Even Ripple has disclosed earlier this year that it, too, had applied for a bank charter.
US Buyer Demand Fades on Coinbase
Coinbase’s share price finally saw a surge on the Wednesday trading session. COIN price jumped by more than 3% over the session to trade around $318 level. This comes in when the COIN price has recorded a dip of almost 18% over the last month.
This comes in when the sentiment around Coinbase in the market has shifted. Bitcoin has recently traded at a discount on Coinbase compared to global averages. It was a reversal of the usual “US buyer premium” that often signals strong retail demand. According to CoinGlass data, the Coinbase Premium Index stayed negative from late October into early November. This is seen as its longest stretch since August.
This downturn followed a sharp pullback in Bitcoin price.. It eventually snapped the market’s usual bullish “Uptober” pattern and dragged sentiment lower across US retail channels. BTC price has dropped by almost 17% in the last 30 days. It managed to forge a recovery rally over the past 24 hours. Bitcoin is trading at an average price of $104,256 at the press time.
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