The Independent Community Bankers of America (ICBA) opposed the Office of the Comptroller of the Currency's (OCC) conditional approval of a federal trust bank charter for Coinbase, Cointelegraph reported on April 3.
ICBA said Coinbase's application fell short on risk controls, profitability and resolution planning. It also argued the OCC lacks legal authority to expand crypto-related trust powers without applying full banking regulations. ICBA said the decision reflects a trend in which nonbank institutions seek to enjoy the benefits of a bank charter while not meeting the same regulatory requirements.
Americans for Financial Reform Education Fund also said the approval departs from long-standing principles upheld by banking law, warning it could expose the financial system to risks linked to crypto market volatility, fraud and money laundering.
The OCC conditionally approved Coinbase's application to establish a federal trust bank after a 6-month review. Coinbase will be able to conduct custody and market infrastructure businesses under the federal supervisory framework with the charter.
It does not plan to take customer deposits or make fractional-reserve loans.
Chi-gyu Hwang
delight@d-today.co.kr