SAN FRANCISCO— Coinbase said it plans to expand and refine its services after receiving conditional approval for a national trust bank charter from the Office of the Comptroller of the Currency.
In a blog post, the San Francisco-based company emphasized that it does not intend to become a traditional commercial bank. Instead, Coinbase said the charter would provide “federal regulatory uniformity” for its custody of customer assets, Yahoo Finance reported.
The move highlights how cryptocurrency firms are becoming more integrated with the traditional financial system, with Coinbase saying the charter will support the development of new products for both individual and institutional clients, according to Yahoo Finance.
Payments are Key
The company pointed to payments as a key area for expansion, noting its existing relationship with Circle, which previously received approval for a national trust banking charter alongside other firms, Yahoo Finance reported.
Coinbase also referenced its existing regulatory framework. Its subsidiary, Coinbase Custody Trust Company, obtained a limited-purpose trust charter from the New York Department of Financial Services in 2018, allowing it to act as a qualified custodian for institutional clients, according to Yahoo Finance.
How it Will Differ from Traditional Banking
The company said that experience helped establish operational maturity and institutional trust, and it will continue to operate under New York regulators and the state’s BitLicense requirements, Yahoo Finance reported.
Coinbase said it does not plan to accept deposits from individuals or engage in fractional reserve banking, distinguishing its model from that of traditional banks, according to Yahoo Finance.
