The Independent Community Bankers of America (ICBA) has formally opposed the Office of the Comptroller of the Currency’s (OCC) conditional approval of Coinbase’s national trust bank charter, arguing the application falls short of regulatory standards and could pose risks to consumers and the broader financial system. ICBA highlighted shortcomings in Coinbase’s risk controls, profitability forecasts and resolution planning, and said the OCC lacks clear statutory authority to confer trust powers for crypto activities without imposing the full range of banking regulations. The group warned the case reflects a broader trend of nonbank firms seeking the benefits of a U.S. bank charter while avoiding comprehensive bank oversight.
Americans for Financial Reform Education Fund also criticized the OCC decision, saying it departs from longstanding banking law and could expose the financial system to volatility tied to crypto markets, plus heightened fraud and money-laundering risks.
The OCC issued conditional approval after roughly six months of review of Coinbase’s proposal to form a national trust bank. Coinbase responded that the charter would bring its custody and market infrastructure operations under federal supervision, and it emphasized that it does not plan to accept customer deposits or engage in fractional-reserve lending. Company executives have argued that integrating crypto into the regulated banking system is preferable to operating outside it.
The pushback over the charter sits within a larger policy clash in Washington over how digital assets should be regulated, especially stablecoins and yield-bearing crypto products. Banking executives and trade groups have warned lawmakers that allowing stablecoin issuers to offer interest could draw significant deposits out of the traditional banking system. In January, Bank of America CEO Brian Moynihan said permitting interest-bearing stablecoins could pull as much as $6 trillion from banks, potentially shrinking lending capacity and increasing borrowing costs. Groups such as the Bank Policy Institute have made similar arguments, saying regulatory gaps could allow yield-bearing stablecoin products to sidestep banking limits and disrupt traditional credit channels.
Coinbase is engaged in talks over the US Digital Asset Market Clarity Act, legislation intended to establish federal rules for crypto. CEO Brian Armstrong previously said Coinbase could not support the bill as drafted because of proposed limits on stablecoin rewards. Coinbase’s chief legal officer recently said lawmakers are nearing agreement on many core elements but that the treatment of yields on stablecoins remains a major unresolved issue. That disagreement has delayed a Senate Banking Committee markup, a key step before the bill can advance to a full Senate vote, leaving efforts to create a federal framework for digital assets stalled.
This dispute underscores the competing priorities among regulators, banks and crypto firms as policymakers try to balance innovation, consumer protection and financial stability.