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

Coinbase is facing opposition from traditional banking advocates as it seeks a U.S. federal trust charter. The Independent Community Bankers of America (ICBA) has urged the Office of the Comptroller of the Currency (OCC) to reject Coinbase's application, citing failures in multiple areas that they argue disqualify the exchange under the OCC’s chartering standards. The ICBA's objections included concerns over Coinbase's ability to operate profitably in a bear market and issues with its risk and control functions. This pushback follows similar resistance to other crypto firms, like Ripple, Circle, and Paxos, which have also faced challenges in securing trust applications. The OCC, which now has a leadership aligned with pro-crypto policies, has yet to respond to the ICBA's letter. Coinbase aims to expand its services and address regulatory demands across various states but asserts it does not intend to become a full-service bank. The situation illustrates the ongoing tension between crypto entities and traditional financial institutions as they navigate overlapping regulatory frameworks.

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