Coinbase, a leading cryptocurrency exchange, is advocating for US regulators to affirm that banking services can be extended to crypto enterprises. The exchange sent a letter to the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board of Governors, and the Federal Deposit Insurance Corporation (FDIC), seeking clarification on the provision of banking services to the crypto industry, as reported by Bloomberg on Feb 4.
The letter from Coinbase reportedly requested the OCC to revoke an interpretive letter that establishes a de facto application process for innovative bank activities, thereby hindering banks from participating in the crypto asset market.
Besides, the US-based exchange appealed to the Fed and the FDIC to validate that state-chartered banks can offer and delegate crypto custody and execution.
In a separate letter, three law firms hired by Coinbase pointed out that existing federal laws authorize banks to offer crypto services and collaborate with third-party service providers like Coinbase. However, banking regulators need to affirm this, Coinbase reportedly stressed.
The role of US banks in catering to the crypto industry has long been a contentious topic. Some banks like BNY Mellon are progressing with plans to offer crypto custody services, but there have been reports that the FDIC has asked several US banks to halt their crypto activities.
In June 2024, Coinbase initiated lawsuits against the US Securities and Exchange Commission and the FDIC, accusing the agencies of a “coordinated attempt to cut off digital-asset firms from essential banking services.”
As the legal battle continues, the community is anticipatively waiting for positive changes in the US crypto landscape. Coinbase’s endeavor to secure banking support for crypto custody and execution signifies a significant development, particularly as the platform is the custodian for several US Bitcoin exchange-traded funds, which commenced trading last year.
