ICBA Opposes Coinbase’s Bid for National Trust Charter, Citing Risks in Crypto Custody

Highlights:

• ICBA opposes Coinbase’s trust charter plan and warns that it could expose the banking system to new and untested risks.
• Coinbase defends its charter bid, saying it aims to connect crypto services with traditional finance safely.
• OCC review of the case may shape how crypto firms seek future banking recognition.

The Independent Community Bankers of America has opposed Coinbase’s plan to obtain a National Trust Company Charter. The group wrote a letter to the Office of the Comptroller of the Currency expressing its vehement objections. It claimed that the suggestion by Coinbase is risky because of untested crypto custody schemes and unpredictable financial performance in bear markets.

📣 Coinbase's bid for a trust bank charter faces opposition from key U.S. banking advocates urging regulatory dismissal.

The opposition highlights concerns about regulatory compliance and potential risk exposures in offering crypto-related banking services. Coinbase continues… pic.twitter.com/ycYpkmuk3H

— Giorgi Apkhazava (@Giorgiapkh) November 4, 2025

The ICBA also raised concerns that the move could threaten the safety of community banks across the country. It urged the OCC to either reject the application or extend the review period for public scrutiny. The group said the crypto exchange’s trust plan could introduce instability into the financial system.

Coinbase’s Chief Legal Officer, Paul Grewal, responded to the opposition in a post on X. He said banks were trying to block progress by protecting their interests. “Imagine opposing a regulated trust charter because you prefer crypto to stay unregulated,” he wrote. Grewal insisted that Coinbase wants to build transparency and compliance rather than challenge banks. Coinbase said it does not plan to become a bank but aims to connect crypto and traditional finance through compliant operations.

Imagine opposing a regulated trust charter because you prefer crypto to stay … unregulated. That’s ICBA’s position. 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… https://t.co/200LCbMGa9

— paulgrewal.eth (@iampaulgrewal) November 4, 2025

ICBA Opposes Coinbase Application Citing Risks to Banking Sector

The ICBA asked the OCC to deny the application or extend its review period for further public input. It said such approval could threaten the stability of community banks that serve local economies. The group also questioned whether a crypto company can meet the same standards expected of traditional trust institutions.

Coinbase applied for the national trust charter in October. The exchange claimed that the move would assist in linking digital assets with the conventional economy. The charter is designed to be applied to regulated custody services of individuals and institutions that require safe crypto storage.

The company feels that the charter has the potential to enhance consumer trust in crypto-based financial products. It has maintained its dedication to transparency and supervision. Nonetheless, the banking groups perceive the charter as a threat to their position in the financial system.

The OCC review of the application could take up to 18 months. The process will determine if Coinbase meets trust company standards and maintains sound financial practices. Coinbase has stated that it will cooperate fully with regulators during the entire process.

OCC Weighs Broader Crypto Applications Amid Industry Shift

The OCC is reviewing several applications from major crypto firms alongside Coinbase’s. Ripple Labs and Circle have also sought national charters to expand their financial operations. Both companies issue stablecoins, which play a growing role in payment systems.

These instances demonstrate the growing strain between conventional banks and digital asset companies. Regulators have to balance between financial stability and innovation as more companies seek official recognition. The application of Coinbase is at the heart of that debate as institutions evolve to meet the evolving financial environment.

The final report of the OCC review might change the way other crypto companies follow these footprints. It can also influence future relationships between traditional banks and blockchain-based firms that might want to gain legitimacy. At the current stage, Coinbase does not give up the fight until OCC makes its decision.