ICBA “Strongly Opposes” Coinbase Belief Financial institution Constitution Software

The Impartial Neighborhood Bankers of America (ICBA) is urging the US Workplace of the Comptroller of the Foreign money (OCC) to reject Coinbase’s utility for a nationwide belief firm constitution.

The ICBA is the workplace answerable for approving banking functions, and mentioned in a current letter to the OCC that  it “strongly opposes” Coinbase’s utility for the constitution by its subsidiary, Coinbase Nationwide Belief Firm. 

“This utility fails to satisfy statutory chartering requirements, presents compounding security and soundness dangers and would set a harmful precedent for the construction of the US banking system,” the workplace mentioned.

Coinbase Constitution Software Fails To Meet Necessities, Says ICBA

The ICBA argued that Coinbase’s constitution utility “fails to satisfy the necessities for the approval” of a nationwide belief financial institution constitution beneath the Nationwide Financial institution Act (NBA) and the “OCC’s personal rules and requirements.” 

“ICBA urges the OCC to disclaim this Software on a number of impartial grounds, every of which is disqualifying beneath the OCC’s statutory chartering requirements,” the workplace added. 

The ICBA then highlighted “basic deficiencies” that it says the applying displays in “no less than three key areas.”

Firstly, the Coinbase subsidiary proposes to depend on the trade’s “demonstrably flawed danger and management features” whereas additionally working beneath a governance construction “that stops impartial oversight,” in response to the ICBA.

The ICBA additionally argued that the Coinbase subsidiary “would wrestle to realize and keep profitability throughout crypto bear markets” given its “slim focus in particular kinds of digital asset custody.” 

It added that the subsidiary’s mother or father firm, Coinbase, would wrestle throughout crypto bear markets as nicely resulting from its excessive focus to the digital asset market, and gained’t be capable to present the subsidiary with a lot assist throughout these market downturns. 

Lastly, the ICBA argued that the OCC’s “untested receivership framework would wrestle to resolve an uninsured establishment” that has the proposed scale and “operational complexity” of the Coinbase subsidiary.

Along with the considerations round these three key areas, the ICBA mentioned that there are “vital authorized and procedural points that should be resolved” earlier than Coinbase’s nationwide belief financial institution constitution utility may be permitted. 

In line with the ICBA, the applying seems to depend on the OCC’s Interpretative Letter 1176, which appears to be like to authorize nationwide belief banks to interact in non-fiduciary actions past these which might be permitted beneath 12 U.S.C. § 92a.

The ICBA mentioned that the interpretative letter “was issued with out the general public discover and remark procedures” which might be required by the Administrative Process Act (APA). Subsequently, the ICBA argues that the letter “is just not legally legitimate” as a result of the OCC “can’t lawfully approve actions based mostly on an interpretative letter that violates the APA.” 

Coinbase Attempting To Bridge The Hole With TradFi

The ICBA’s letter comes after Coinbase utilized for a nationwide belief constitution in October. This transfer is a part of the trade’s broader plan to “bridge the hole between the crypto economic system and conventional monetary system,” the agency mentioned in an announcement on the time. 

Coinbase added in its assertion that it “has no intention of turning into a financial institution.” 

In response to the ICBA’s letter, Coinbase’s chief authorized officer Paul Grewal mentioned on X that the letter is “one other case of financial institution lobbyists attempting to dig regulatory moats to guard their very own.”

Think about opposing a regulated belief constitution since you choose crypto to remain … unregulated. That’s ICBA’s place. It’s one other case of financial institution lobbyists attempting to dig regulatory moats to guard their very own. From undoing a regulation to go after rewards to blocking charters, protectionism… https://t.co/200LCbMGa9

— paulgrewal.eth (@iampaulgrewal) November 4, 2025

“From undoing a regulation to go after rewards to blocking charters, protectionism isn’t shopper safety,” he added. 

Different Crypto Firms Await Discover From US Regulators

Though Coinbase mentioned it doesn’t plan on turning into a financial institution through its OCC utility, different crypto corporations, together with Ripple and Circle, have utilized for nationwide financial institution charters.

That’s after the US authorities handed laws to ascertain a framework for fee stablecoins. Each Ripple and Circle have their very own stablecoins. Ripple provides its RLUSD token which has a market cap of over $1 billion, whereas Circle’s USDC is the second-largest stablecoin out there with a capitalization of over $75 billion.

Greatest stablecoins by market cap (Supply: CoinMarketCap)

Final week, the crypto-native corporations making use of for banking charters acquired pushback from the Financial institution Coverage Institute (BPI), which is a Wall Road lobbying group. The BPI focused Coinbase as nicely. Ripple CEO Brad Garlinghouse responded by calling for equal entry for crypto corporations to banking infrastructure.

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