Coinbase Exec Criticizes Banks’ Abandonment of Crypto Charter App Coinstar

The Independent Community Bankers of America (ICBA) opposes cryptocurrency exchange Coinbase’s request for a National Treasury Company Charter in the US — a move that could threaten banks’ interests as the company moves closer to traditional finance.

In a letter Monday to the U.S. Office of the Comptroller of the Currency (OCC) — the office responsible for approving bank applications — ICBA he said “strongly opposes” Coinbase subsidiary applying for charter of trust. The letter cited “unverified” elements related to crypto custody, as well as claims that Coinbase’s arm “will struggle to achieve and maintain profitability during bearish crypto markets.”

“Imagine opposing a regulated trust charter because you prefer cryptocurrencies to remain… unregulated,” he said Coinbase Chief Legal Officer Paul Grewal in an X post on Tuesday. “That’s ICBA’s position. It’s another case of bank lobbyists trying to dig regulatory holes to protect their own.”

Coinbase applied for a national foundation charter in October as part of its plans to “bridge the gap between the cryptoeconomy and the traditional financial system”. Reports have suggested that the OCC could take between 12 and 18 months to review a crypto exchange’s application.

Related: Nordic bank that once shunned crypto to soon offer Bitcoin ETP

ICBA’s letter urges the OCC to deny Coinbase’s request or, alternatively, allow more time for public review of the company’s business plan and the “legal, prudential and public interest implications.”

Cointelegraph reached out to the OCC for comment but had not received a response at the time of publication.

Crypto companies await notice from US regulators

Although Coinbase said it “has no intention of becoming a bank” through its filing with the OCC, other crypto companies, such as Ripple Labs and Circle, have applied for national bank charters. These moves come after the US government passed legislation to establish a framework for stable payment coins — both Ripple and Circle issued their own stable coins, Ripple USD (RLUSD) and USDC (USDC).