Community bankers warn the regulator’s conditional approval raises legal and prudential concerns, as Coinbase moves closer to securing a national trust bank charter.
The Independent Community Bankers of America (ICBA) has described the Office of the Comptroller of the Currency’s (OCC) conditional approval of Coinbase’s national trust bank charter as a “grave mistake”, marking the latest escalation in a dispute over how US regulators oversee crypto firms.
In a statement released on 2 April, ICBA President and CEO Rebeca Romero Rainey said the decision “will only serve to put US consumers at risk”, reiterating the association’s long-standing opposition to Coinbase’s application for a national trust bank charter.
The intervention follows confirmation from Coinbase that it has received conditional approval from the OCC to establish Coinbase National Trust Company, a proposed entity intended to operate under federal supervision.
Coinbase framed the approval as a milestone in its efforts to bring its digital asset custody business under a unified federal regulatory framework, after years of operating primarily under state-level regimes such as the New York Department of Financial Services.
The company stated the charter would not transform it into a traditional bank. It does not plan to take retail deposits or engage in lending, but instead intends to use the structure to support custody and market infrastructure services, with potential expansion into payments-related offerings.
The approval remains conditional, meaning the OCC has not yet granted full authorisation and Coinbase must satisfy additional supervisory requirements before the charter is finalised.
ICBA challenges legal basis and risk profile
ICBA’s opposition centres on both legal and prudential concerns. The association argues that Coinbase’s application “fails to meet requirements of the National Bank Act and the OCC’s own regulations and standards”, and points to what it describes as deficiencies in risk controls, profitability and resolution planning.
In its earlier submission to the OCC, ICBA also raised broader concerns about the regulator’s approach to chartering national trust banks. It argued that proposed changes to the framework could allow entities to engage in non-fiduciary cryptocurrency-related activities without being subject to the same prudential requirements as FDIC-insured institutions.
“We also continue to have significant concerns with the OCC’s chartering rule for national trust banks, which is inconsistent with its statutory authority laid out in legislative history, judicial interpretations, and the agency’s own internal precedent.” – Rebeca Romero Rainey
The group has called for the OCC to withdraw or amend its rulemaking and, at minimum, impose a moratorium on pending applications until a final regulatory framework is established.
Debate over the scope of trust bank charters
At the centre of the disagreement is the role of national trust banks, which typically focus on custody and fiduciary services rather than deposit-taking.
ICBA contends that the OCC’s interpretation risks expanding these charters beyond their traditional scope, particularly if they are used to support a wider range of crypto-related activities. It has also questioned whether uninsured trust banks operating without deposit-taking functions should fall outside elements of the Bank Holding Company Act and other supervisory frameworks.
The association further warned that such structures could create confusion about the level of regulatory protection afforded to customers and complicate resolution processes in the event of failure.
Coinbase, for its part, has consistently argued that federal oversight would provide greater clarity and consistency for digital asset services. The firm said the OCC charter is designed to bring “clear oversight over assets in safekeeping” and support the development of new products within a regulated framework.
The company also confirmed it will continue to operate under existing state-level licences, including its New York BitLicense, alongside any future federal charter.
