Coinbase has announced that it has obtained initial approval for a national trust company charter from the U.S. Office of the Comptroller of the Currency, as reported by Bloomberg. This development marks a significant step towards the company's goal of operating as a federally regulated crypto custodian. The approval is conditional, requiring Coinbase to fulfill specific requirements before receiving a full charter.
These conditions typically involve establishing compliance systems, recruiting key personnel, and undergoing regulatory reviews. The OCC also expects firms to demonstrate their ability to manage risk, protect client assets, and adhere to anti-money laundering rules. Only after completing these steps can the agency grant final approval.
According to Paul Grewal, Coinbase's chief legal officer, "We still need final approval... our business will not operate under an OCC charter until we have that final approval." This next phase enables the company to explore ways to expand its business in exciting and important ways for crypto's development. If the charter is finalized, Coinbase will be allowed to operate a non-insured national trust company, enabling it to hold digital assets on behalf of clients while prohibiting it from accepting deposits or making loans.
Coinbase initially applied for the charter in October, alongside firms such as Ripple. Recently, Citadel-backed exchange EDX Markets also filed for a similar structure, indicating a growing demand for regulated custody as large investors enter the crypto market. For institutions, custody is less about trading and more about trust. A pension fund, for example, may want exposure to bitcoin but needs a regulated entity to hold the asset securely.
A federal charter can provide that assurance in a way state licenses may not. This move aligns with Coinbase's effort to reduce its reliance on trading fees, which can fluctuate with market cycles. Custody offers steadier revenue, and the company already acts as a custodian for several U.S. spot bitcoin exchange-traded funds, holding the underlying assets on behalf of fund managers.
According to Grewal, "The big opportunity going forward would be payments... custody-adjacent but separate. We think we'll be able to offer a much wider range of products and services to our customers than ever before."