Coinbase announced on Monday that the Office of the Comptroller of the Currency granted final approval to charter Coinbase National Trust Company. The OCC signed off on the application last Friday, bringing the exchange’s institutional custody business under a single federal regulator. This move builds on a limited purpose trust charter from the New York Department of Financial Services in 2018 and follows conditional approval in April. The company did not provide a date for when customer accounts will migrate to the new entity or specify the exact terms of the agreement.
A Narrower Scope Than Banking
A national trust charter is significantly narrower than a full banking license, which prevents the firm from lending out customer deposits. Austin Campbell, founder of Zero Knowledge Group, explained that a trust bank cannot engage in fractional reserve banking or take retail deposits. Instead, the entity can hold customer assets and manage stablecoin reserves, a distinction that keeps the operation focused on custody rather than commercial lending. Coinbase described the approval as "the next iteration" of its regulatory work, adding federal oversight to its existing New York track record.
Ryan VanGrack, Vice Chair at Coinbase, stated that the company had "spent years asking for clear rules and rigorous oversight." He added that the approval "puts more of our business behind that commitment," while Chief Policy Officer Faryar Shirzad noted that the firm has always pursued best-in-class regulatory oversight. CEO Brian Armstrong tweeted that trusted custody is essential for bringing more of the financial system onchain, calling the trust company another step for building that foundation. The company claims the charter opens the door to expanded custody capabilities and lays the foundation for potential future payment and stablecoin services, though it provided no timeline for those specific launches.
Legal Challenges and Peer Approvals
This approval places Coinbase in the same category as Circle and Ripple, both of which won final OCC approvals this year. Circle National Trust will manage USDC reserves, while Ripple National Trust Bank will handle RLUSD reserves and digital asset custody once it opens. However, these charters face immediate legal opposition from the Independent Community Bankers of America, which sued the OCC in federal court on October 2. The trade group argues that the regulator lacks the authority to grant national trust charters to crypto firms that do not mainly act as fiduciaries.
Senator Elizabeth Warren also argued that the OCC’s crypto charter approvals are illegal, describing them as a side door into banking. Despite the legal hurdles, the OCC maintains that its rule clarifies powers trust banks have long held. Other firms like Block and Kraken parent Payward are still awaiting final approval for their own applications. The current framework allows crypto firms to operate under federal supervision without becoming commercial banks, a structure that remains contested in court but clearly operational for major players.
