The news: The Independent Community Bankers of America (ICBA) urged the Office of the Comptroller of the Currency (OCC) to reject Coinbase’s application for a national trust charter, arguing that the application has “serious deficiencies.” The ICBA’s ultimate agenda is “to ensure strong, clear, and consistent oversight of digital asset service providers.”
More on this: Coinbase filed to create the Coinbase National Trust Company, a noninsured nationally chartered trust company. Coinbase’s objective is to expand its custody business— including holding digital assets independently and fiat funds and crypto in a single wallet—to facilitate crypto trading and related services.
Coinbase isn't the first crypto firm to apply for a national trust charter. During the first Trump administration, Anchorage Digital Bank, Protego Trust Bank, and Paxos National Trust received conditional approval for national trust bank charters. Anchorage Digital Bank has held a national bank trust charter since 2021, while Paxos’ and Protego’s applications expired before charters were granted.
What’s next: The wave of trust charter applications by crypto firms signals a renewed push into federally regulated financial services. In June, Circle announced that it had applied for a national trust charter. In July, Ripple did the same. In August, Paxos said it’s reapplying for a charter. And in October, Crypto.com and Bridge (owned by Stripe) filed applications.
Our take: The Trump administration’s crypto friendliness is a threat to banks as much as regulatory leniency and stablecoin clarity is a relief: A trust charter confers legitimacy on a crypto firm, but it doesn’t require deposit insurance. These standards may enable crypto companies to compete more vigorously with traditional institutions.
Large banks are adapting to a blend of traditional and decentralized finance: JPMorgan Chase, Citi, BNY, and U.S. Bank offer institutional crypto services, and asset manager Fidelity offers institutional cryptocurrency custody. But the overall financial system isn’t ready. Crypto firms are remaking institutional finance with unclear long-term consequences, and most of the banking industry has no idea where to start.