Crypto Platform Blasts Banks for Blocking Trust Charter Bid

Source: CryptoNewsNet Original Title: Coinbase Blasts Banks for Blocking Crypto Trust Charter Original Link:

Key Takeaways

Community banks oppose certain platform’s charter bid:

The Independent Community Bankers of America (ICBA) formally objected to a certain compliance platform’s application for a National Trust Company Charter, citing concerns regarding governance, risk management, and profitability related to the crypto market’s volatility.

Platform accuses banks of protectionism:

The Chief Legal Officer criticized the ICBA’s stance, claiming traditional banks are trying to maintain “regulatory moats” to keep crypto-focused firms from gaining equal footing under federal oversight.

Charter approval could reshape crypto regulation:

If granted, the charter would allow the platform to operate under direct OCC supervision, bridging traditional banking and digital asset services — a move that could set a precedent for other crypto firms seeking federal trust status.

Background

The Independent Community Bankers of America (ICBA), a trade group for smaller US banks, formally opposed the charter bid.

In a letter to the Office of the Comptroller of the Currency (OCC) on November 3, the ICBA argued that the proposed charter “fails to meet the requirements for approval of a national bank charter” under existing laws and regulations.

It raised concerns around governance, profitability during market downturns, the legal status of an interpretive opinion that opens crypto-related activities for trust charters, and the risk posed by the platform’s core revenue link to crypto markets.

ICAB urged the OCC to either reject the application or extend the review period to allow for more public scrutiny of its legal and prudential implications.

The Platform’s Response: Regulatory Moats

The Chief Legal Officer pushed back hard, noting that opposing a regulated trust charter because crypto should remain unregulated represents protectionism. He stated: “It’s another case of bank lobbyists trying to dig regulatory moats to protect their own. From undoing a law to go after rewards to blocking charters, protectionism isn’t consumer protection.”

The platform maintains it is not seeking to become a bank through this charter, but rather is asking for a regulatory structure that allows custody and trust-accounting activities under federal oversight. They intend to “bridge the gap between the crypto economy and the traditional financial system.”

What’s at Stake & What Happens Next

If approved, this charter would bring parts of the platform’s operations under direct federal oversight via the OCC, giving it legitimacy and potentially easing friction with other financial infrastructure.

But the review may take time: reports suggest the OCC could take 12 to 18 months to complete the application. Meanwhile, other crypto/fintech firms are also pursuing similar federal banking/trust-charter pathways.

Banks worry about risk — especially around downturns in cryptocurrency value, the novel legal structuring of crypto custody under bank-type rules, and the potential for instability in stress events. On the flipside, proponents argue that bringing crypto firms under chartered regulation enhances consumer protections and oversight, and could be key for integrating traditional finance with new digital-asset models.