Paul Grewal accuses traditional banks of protecting their turf as Coinbase seeks a national trust charter to connect digital assets with mainstream finance.
A new dispute has emerged between Coinbase and U.S. banking lobbyists as the Independent Community Bankers of America (ICBA) voiced strong opposition to the crypto exchange’s National Trust Company Charter application. The pushback underscores growing friction between traditional financial institutions and digital asset firms aiming to integrate into regulated financial systems.
Banks Push Back on Coinbase’s Charter Bid
In a Monday letter to the Office of the Comptroller of the Currency (OCC) — the federal regulator responsible for approving banking charters — the ICBA said it “strongly opposes” Coinbase’s attempt to gain trust company status. The group argued that crypto operations remain “untested” and questioned the exchange’s profitability during prolonged bear markets.
Coinbase’s chief legal officer, Paul Grewal, quickly responded, criticizing the banking lobby for resisting regulated innovation.
“Imagine opposing a regulated trust charter because you prefer crypto to stay… unregulated,” Grewal posted on X. “It’s another case of bank lobbyists trying to dig regulatory moats to protect their own.”
Coinbase’s Plan to Bridge Traditional and Crypto Finance
Coinbase submitted its charter application in October, outlining its goal to “bridge the gap between the crypto economy and traditional financial systems.” The approval process, overseen by the OCC, could take 12 to 18 months, according to reports.
While the exchange clarified it has “no intention of becoming a bank,” the trust charter would allow Coinbase to offer regulated custody services, positioning it closer to the financial mainstream while maintaining compliance with federal oversight.
Regulatory Landscape and Industry Implications
The ICBA urged the OCC to deny the application or extend the public review period, citing potential “legal and prudential risks.” Their opposition mirrors wider concerns among traditional banks about crypto firms encroaching on their domain.
Meanwhile, other blockchain companies — including Ripple Labs and Circle — have also filed for similar national bank charters. These efforts follow recent U.S. legislative developments aimed at establishing a stablecoin regulatory framework.
Coinbase’s pursuit of a trust charter marks a strategic step toward regulatory integration — but the sharp resistance from banking groups highlights the ongoing power struggle between digital finance innovators and entrenched financial institutions.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.