Coinbase has received final approval from the US Office of the Comptroller of the Currency (OCC) to charter Coinbase National Trust Company, moving its crypto custody business under federal bank supervision.
The exchange announced the decision on Monday, November 9, in a blog post by Rick Schonberg, its head of prime trading and custody. It said the OCC approved its application “last Friday”.
The final sign-off comes seven months after the regulator granted preliminary conditional approval on April 2, subject to preopening requirements, according to the OCC’s published decision letter.
What the charter covers
The new entity is a national trust bank, which is narrower than a full banking licence.
According to the OCC’s April letter, the bank plans to provide digital asset custody as a fiduciary, “primarily for institutional clients”, and will have its main office in New York.
Custody customers will be able to accept, hold and transfer fiat currency and digital assets in their custodial accounts. The OCC said fiat held in custody will sit in “for benefit of” accounts at third-party banks.
The trust bank may also act as a finder, giving custody clients access to staking, Prime Trading and Prime Financing offered by Coinbase affiliates. The OCC said the bank will not provide those underlying services itself.
The letter also noted that the bank “does not propose to issue stablecoins”. Coinbase told Unchained, however, that the charter “lays the foundation for potential future payment and stablecoin services”, without giving a timeline.
Coinbase, which our Coinbase review covers in more detail, said the charter brings “clear and consistent federal uniformity” to its custody capabilities.
Capital conditions and a three-year migration
Coinbase’s custody services are currently run by Coinbase Custody Trust Company, a limited purpose trust company chartered by the New York State Department of Financial Services (NYDFS).
Under the plan set out in the OCC letter, Coinbase will migrate the entirety of that custody business to the national trust bank over a three-year de novo period.
The conditions attached to the April approval require the bank to maintain at least $60 million in tier 1 capital. The greater of 50% of that capital or $30 million must be held in eligible liquid assets.
The bank must also hold 180 days of operating expenses in separate eligible liquid assets. It must give the OCC at least 60 days’ notice before any significant change to its business plan. Those conditions run through the bank’s first three years of operation.
Coinbase did not say when the trust company will begin operating or when client accounts will move, Unchained reported.
Part of a wider wave of crypto charters
Coinbase is the latest large crypto firm to complete the OCC chartering process.
Ripple said on October 26 that the OCC had granted final approval for Ripple National Trust Bank, which will manage the reserves backing its RLUSD stablecoin and offer custody. Circle secured final approval for its own trust bank in July, according to Cointelegraph.
Others remain at the conditional stage. OCC records show Crypto.com’s Foris DAX National Trust Bank and Stripe-owned Bridge received conditional decisions in February.
The approvals face legal challenge. The Independent Community Bankers of America (ICBA) sued the OCC on October 2 in federal court in Washington, arguing that the regulator has exceeded its authority by granting national trust charters to crypto firms.
ICBA chief executive Rebeca Romero Rainey said at the time that Congress did not create the charter “as a side door into the banking system for crypto firms”.
Coinbase described the approval as building on its work with NYDFS, which began with a BitLicense in 2017.
The practical test now is the migration itself. For institutional clients weighing custody options, and for investors tracking the best crypto exchanges , the speed and terms of that transfer will be the next details to watch.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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