Conflict between banks and crypto exchange Coinbase

The Independent Bankers of America (ICBA) has called on the U.S. Office of the Comptroller of the Currency (OCC) to deny cryptocurrency exchange Coinbase’s application for a banking license. The OCC’s decision could determine the future of digital asset integration into the traditional U.S. financial system, and the debate surrounding the application is rapidly gaining momentum.

Reasons for ICBA’s Opposition

The ICBA categorically opposes Coinbase’s subsidiary receiving national trust bank status. Such a license would allow the exchange to provide state financial services—for example, to store Treasury bonds and digital assets—without the need for separate permits in each state.

The ICBA believes such a decision could jeopardize the interests of traditional banks. The organization argues that Coinbase will struggle to maintain stable profitability amid a potential prolonged bearish trend in the cryptocurrency market. Therefore, the ICBA has demanded that the OCC either deny the company’s application or allow more time for public comment on its business plan and the legal implications of issuing a license.

Coinbase’s Response and the Company’s Position

Coinbase General Counsel Paul Grewal sharply criticized the bankers’ position. He stated that financial institutions oppose a regulated license because they prefer cryptocurrencies to remain unregulated, allowing traditional banks to protect their own interests. Grewal emphasized that barring crypto companies from banking licenses does not contribute to consumer protection.

Context and Outlook

Coinbase filed its application in October, seeking to bridge the gap between the crypto industry and traditional finance. The review process could take 12-18 months. Ripple Labs, Circle, and Crypto.com have previously applied for similar licenses.

Of additional significance is that this summer, the OCC introduced updated rules for the custody of digital assets for commercial banks, aimed at strengthening AML and CFT measures. These changes highlight the growing need for clear regulation of the crypto market at the federal level.