Coinbase Faces Flak from Traditional Bankers on Its Push for Trust Bank Charter

Core Viewpoint - A U.S. bank lobbying group is opposing Coinbase's application for a trust charter, claiming it does not meet several regulatory requirements [1][2]. Group 1: Opposition from Banking Groups - The Independent Community Bankers of America (ICBA) has formally opposed Coinbase's trust charter application, stating it fails on multiple grounds that disqualify it under the Office of the Comptroller of the Currency (OCC) standards [2][3]. - This opposition follows a similar stance from the Bank Policy Institute (BPI), which also targeted Coinbase and other crypto firms like Ripple, Circle, and Paxos [2]. Group 2: Concerns Raised - The ICBA argues that Coinbase's trust bank would struggle to be profitable in a bear market and that the OCC would face challenges in dissolving the trust if it fails [3]. - The organization also claims that Coinbase's risk and control functions are "demonstrably flawed" and that the interpretive letter used for the application was not issued properly [3]. Group 3: Coinbase's Response and Intentions - Coinbase's chief legal officer criticized the banking groups for attempting to protect their interests by opposing the charter, suggesting that they prefer the crypto industry to remain unregulated [4]. - Coinbase applied for the trust charter to expand its services, such as payments and settlements, and to simplify regulatory approvals across multiple states, clarifying that it does not intend to become a full-service bank [5].