Coinbase Moves Toward Federal Oversight With OCC Charter Bid

• Coinbase seeks OCC charter to expand services nationwide without state-by-state approval.
• Federal oversight strengthens Coinbase’s custody foundation while enabling payments and settlement growth.
• Industry peers like Circle and Ripple also pursue federal supervision for uniform regulation.

Coinbase has shifted towards increasing its regulatory setup and its presence within the digital asset sector. The company stated that it has also submitted a national trust charter application to the U.S. Office of the Comptroller of the Currency (OCC). In case it passed the charter, Coinbase would be able to expand beyond custody services but be subjected to direct federal oversight. The shift highlights its approach of integrating innovation and regulatory clarity as the digital assets take up a more significant place in global finance.

Coinbase Applies for OCC National Trust Charter

According to Coinbase, the charter of the OCC would enable it to provide new services like payments and settlement without approval by the states on a case-by-case basis. The company then made it clear that it will not become a bank but wants to be a part of a unified federal system. According to Greg Tusar, the Coinbase institutional product vice president, the company uses strict rules and regulatory trust to promote innovation and guarantee regulation and safety.

The Coinbase Custody Trust Company (CCTC) currently operates under the New York Department of Financial Services (NYDFS) under its BitLicense regime, which began in 2015. According to the company, this state-level system has given it maturity and trust, leading to readiness to have a federal charter. Coinbase anticipates a faster compliance with the OCC charter, increased institutionalization, and product diversification across the nation.

Federal Oversight and Next Steps for Coinbase

The move by Coinbase is not new, as it emulates moves by Circle, Ripple, and Paxos, as is acknowledged as a wider trend in the industry towards federal oversight. The exchange stated that as long as Congress is still formulating legislation concerning long-term market structure, an OCC charter would offer a regulatory framework to digital assets in the present moment. According to the firm, the presence of federal regulation would enable it to close the divide between the crypto economy and conventional finance.

The company affirmed that CCTC and Coinbase Inc. will continue to be under the monitoring of NYDFS, as the OCC looks through the application. Coinbase announced that it will work with the OCC closely, take feedback into account, and provide feedback. It included that it was not the first to pursue a national charter, but the approval would make Coinbase the leader in the financial system as it is being developed.