Coinbase Receives OCC Approval for National Trust Charter

The OCC gave Coinbase conditional approval for a National Trust Bank charter. Coinbase secured this approval to expand its banking role. The firm announced this in a blog post on Thursday.

With the announcement, the exchange joins a growing list of crypto firms that have received conditional approvals from the OCC.

Coinbase Says It Will Not Become a Commercial Bank

According to Coinbase, the approval represents a landmark achievement for the exchange in its pursuit of regulatory clarity. It described it as a result of years of regulatory engagement and compliance efforts.

The exchange clarified that approval does not signal entry into commercial banking. It emphasized that it has no such plans. Coinbase Institutional co-CEO Greg Tusar wrote

Instead, the charter is expected to provide clarity for its custody and market infrastructure business. Obtaining an OCC national trust charter now means this aspect of the Coinbase business is uniformly under federal regulation.

Coinbase previously relied on the BitLicense from the NYDFS as its regulatory framework. Tusar explained that conditional approval changes this. It allows Coinbase to expand its products for institutions. It also enables the company to broaden services for retail users.

He wrote:

Coinbase COIN Slides Downward Despite Approval

Meanwhile, the positive development had little impact on Coinbase’s (COIN) stock performance. The stock slipped slightly today to hover around $171. It has already lost 24% of its value this year.

The poor performance is not surprising, as it reflects the general crypto market. With Bitcoin falling again to $66,000 today, the rest of the sector tanked as well, including crypto-related equities.

Nevertheless, the relatively symbolic nature of today’s approval might also be the reason behind the tepid market sentiment. Already, several crypto companies, including Ripple, Paxos, BitGo, Crypto.com and others, have obtained the same approval.

While the new OCC conditional approval marks a step up, it is still a long road to full approval. The firms must agree to several requirements and conform to rules under the GENIUS Act, among others.

Unsurprisingly, Coinbase has stated that it will continue to operate under the NYDFS oversight. However, the conditional approval is still good news, as it highlights Coinbase’s aim to grow its institutional business.

Coinbase’s charter application states that it manages $245 billion in assets and serves as custodian for 80% of ETFs. Analysts have also highlighted Coinbase’s market infrastructure business as crucial to its long-term growth.