The Independent Community Bankers of America (ICBA) has opposed the Office of the Comptroller of the Currency’s (OCC) conditional approval of Coinbase’s national trust bank charter, arguing the application fails to meet regulatory standards and could threaten consumers and the financial system.
ICBA said Coinbase’s filing revealed weaknesses in risk controls, profitability projections and resolution planning, and contended the OCC lacks the statutory authority to extend trust powers for crypto-related activities without applying the full suite of banking regulations. The trade group warned the trend reflects nonbank firms seeking the advantages of a U.S. bank charter while avoiding the full scope of bank oversight.
Americans for Financial Reform Education Fund also criticized the OCC’s decision, saying it departs from longstanding banking law and could expose the system to risks from crypto market volatility, fraud and money laundering.
The OCC issued conditional approval after roughly six months of review for Coinbase’s plan to form a national trust bank. Coinbase responded that the charter would place its custody and market infrastructure operations under federal supervision and emphasized it does not intend to take customer deposits or engage in fractional-reserve lending, adding that “the right path forward for crypto is through the system — not around it.”
Stablecoin yield dispute stalls crypto market structure bill
The backlash is part of a wider clash between banking groups and crypto firms over how digital assets should fit into the financial system, especially concerning stablecoins and yield-bearing products.
In January, Bank of America CEO Brian Moynihan warned that permitting stablecoin issuers to offer interest could pull as much as $6 trillion of deposits out of the banking system, shrinking lending capacity and raising borrowing costs. Industry groups such as the Bank Policy Institute have made similar arguments to lawmakers, saying regulatory gaps could let yield-bearing stablecoin products sidestep limits and disrupt traditional credit channels.
The debate is unfolding in Washington as Coinbase participates in discussions around the US Digital Asset Market Clarity Act, legislation intended to set federal rules for crypto. Coinbase CEO Brian Armstrong previously said the company could not support the bill as drafted because of limits on stablecoin rewards. On Thursday, Coinbase chief legal officer Paul Grewal stated that lawmakers were approaching agreement on core elements, but that the question of yield remains a major sticking point.
Disagreement over stablecoin yields has delayed a Senate Banking Committee markup, a necessary step before the bill can reach a full Senate vote, leaving broader efforts to create a federal framework for digital assets unresolved.
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