Banks urge OCC to deny Coinbase’s national trust charter application

Core Viewpoint - The Independent Community Bankers of America (ICBA) opposes Coinbase's application for a national trust bank charter, citing concerns over its risk management and governance practices [1][2]. Regulatory Concerns - The ICBA argues that Coinbase's application does not meet statutory chartering standards and poses safety and soundness risks, potentially setting a dangerous precedent for the U.S. banking system [2]. - The ICBA's main argument focuses on the legal foundation of Coinbase's application, which relies on OCC Interpretive Letter 1176, claiming it violates the Administrative Procedure Act due to lack of public notice and comment [5][6]. Industry Dynamics - Coinbase's chief legal officer, Paul Grewal, characterizes the ICBA's opposition as protectionism aimed at maintaining competitive advantages for community banks, suggesting that it hinders innovation in the crypto space [3][4]. - The ongoing debate highlights the tension between traditional banking institutions and the emerging crypto industry regarding the regulation and custody of crypto assets [2].