Coinbase Gets Final Banking License in United States

Coinbase, the largest crypto exchange in the United States, has received final approval to establish a nationwide trust bank. This places an important part of its services under federal banking supervision. The move could help Coinbase grow in crypto custody and payments, but doesn't make the company a regular bank yet.

The US regulator Office of the Comptroller of the Currency (OCC) granted final approval last week. The public register shows that the permit took effect on 6 November. Coinbase had already received provisional approval in April, but had to meet additional conditions after that.

The new bank is called Coinbase National Trust Company and focuses mainly on the safekeeping of digital assets of large investors. Think of asset managers and financial institutions that do not want to organise the security of their crypto coins themselves. Coinbase already offers such services, but the new license places those activities under the supervision of a national banking regulator.

That's different from a full banking license. Coinbase is not allowed to offer ordinary savings accounts or provide loans through this trust bank like a traditional bank. A trust bank holds assets in custody, manages them for customers and can perform certain services that are directly related to those assets.

Payments also play a role in the plans. The license allows Coinbase to process certain transactions associated with assets that the trust bank holds for customers. In addition, the company has been betting on stablecoins for some time, digital coins that are usually linked to an existing currency, such as the US dollar.

Bloomberg writes on the basis of insiders that the new status means that Coinbase may eventually be able to issue its own stablecoins or support other companies in doing so. Permission was not automatically granted for this. The original application explicitly states that the trust bank itself would not issue stablecoins.

The ambitions are visible in existing partnerships. In September, Coinbase and Citigroup expanded their collaboration to make it easier to convert ordinary dollars and stablecoins into each other. At the end of October, Coinbase announced together with Ripple that Ripple's stablecoin RLUSD will become available through its trading platforms. In addition, Coinbase receives a share of the income Circle earns from USDC, the second largest stablecoin.

Coinbase is not the only crypto player to get a foothold in the US banking sector. Circle and Ripple have already received a final trust banking license. Other companies have been given the green light for the time being, but are still going through the final steps of the permit process.

Under President Donald Trump, more crypto companies have started looking for such a license. They want to offer their services within the existing financial supervision, while traditional banks and crypto companies cooperate more often. For Coinbase, the license is especially important because the management of crypto assets of large customers is a core activity.

Vice President Ryan VanGrack sees the approval as a sign that crypto is gaining a permanent place in the financial system. CEO Brian Armstrong says Coinbase is already the largest custodian of cryptocurrencies worldwide. Coinbase will transfer its existing custody activities from the New York regulated trust company to the new bank. The application to the OCC states that the company has provided a period of three years for this.