Crypto Exchange Coinbase has applied for a National Trust Company Charter with the Office of the Secretary of Currency (OCC) as the number of US-based crypto companies pursuing the same license is growing.
“Coinbase is taking an important step towards expanding business capabilities and regulatory oversight beyond existing frameworks, paving the way for innovation and growth to build a modern financial system with digital assets,” Coinbase said in a statement Friday.
coinbase pursues licenses to “fill the gap” with cordfi
Pursuing licensing is part of a strategy that “to bridge the gap between the crypto economy and the traditional financial system,” according to Coinbase. However, we are not interested in changing the core focus of operations.
“Coinbase is not going to be a bank. It is our firm belief that the clear rules and trust of regulators and customers allow Coinbase to innovate confidently while ensuring proper monitoring and security.”
Luke Youngblood, a former Coinbase employee who led the creation of Coinbase’s staking rewards, explained in a podcast released Friday that the licence allows Coinbase to “essentially eliminate the need for built-in on-ramp, off-ramp and partner banks to use partner banks on-ramp.”
Coinbase said that license approvals allow exchanges to expand beyond custody services and open doors for payments and other related services under clearer regulatory guidance.
However, political commentator Brendan Pedersen added, “In theory, there are more limitations when it comes to business activities than other types of banks, but that distinction has been blurred over the years.”
Improvements to the former Coinbase Exec Notes app
According to Youngblood, Coinbase’s retail application has improved significantly since he quit his job at the exchange in 2022.
“You can really say that they hired some top engineering talent,” Youngblood said.
Related: AI agents need crypto to operate in financial markets: CoinbaseExec
Several other crypto companies have recently applied to the National Trust Charter.
On July 1st, Stablecoin Issuer Circle applied to establish a national trust bank in the United States. A few days later, Ripple Labs applied for the same license.
Ripple Labs CEO Brad Garlinghouse said that if the license is approved, it will become a “new (and unique!) benchmark for trust in the Stablecoin market.”
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