Coinbase CLO: Bank Groups Opposing Trust Charter Bid Engaging in 'Protectionism'

Coinbase's Chief Legal Officer Paul Grewal criticized banking groups, particularly the Independent Community Bankers of America (ICBA) and the Bank Policy Institute (BPI), for opposing Coinbase’s application for a national trust bank charter. They argue that this opposition reflects an effort by banks to maintain the status quo of unregulated crypto markets. The ICBA's comments claim Coinbase's proposal is too vague and raises systemic risks without additional details on its business plan. Grewal responded, labeling it as a form of protectionism rather than consumer protection. He contended that banks prefer to keep cryptocurrencies unregulated to avoid competition. The BPI also warned that granting the charter could exceed the Office of the Comptroller of the Currency's (OCC) legal authority unless Coinbase is predominantly engaged in fiduciary activities. This clash reflects a broader struggle between traditional financial institutions and emerging crypto entities seeking regulatory clarity and fair competition in the financial landscape.

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