What Coinbase Can—and Can't—Do
Coinbase has secured conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) to form a national trust company, a move that could reshape its custody business but stops short
On paper, the OCC’s nod brings Coinbase closer to federal oversight and regulatory uniformity for its digital asset custody services; in practice, the new charter does not enable Coinbase to accept customer deposits or make loans.
Coinbase first applied for the national trust charter in October 2023, following similar moves by firms like Ripple and EDX Markets.
Not a Bank, Still a Custodian
Despite the “bank” language often attached to trust charters, Coinbase has repeatedly clarified that its ambitions do not include becoming a commercial bank. Greg Tusar, vice president at Coinbase, stated that under this charter the company will avoid both deposit-taking and fractional reserve banking—two hallmarks of traditional banks. Instead, the focus remains on safeguarding digital assets for clients, an area where Coinbase already plays a major role as custodian for several U.S. spot bitcoin exchange-traded funds (ETFs).
Coinbase’s current operation under New York’s Department of Financial Services BitLicense and limited-purpose trust charter will continue alongside any new federal status.
Compliance Hurdles Loom for Final Nod
The OCC’s approval is only conditional at this stage. For Coinbase to obtain full licensure as a national trust company, it must fulfill several regulatory requirements—including building out compliance systems, hiring key personnel for risk management and anti-money laundering (AML), and passing further reviews by federal supervisors. The OCC has made clear that companies must demonstrate robust controls to protect client assets and manage operational risks before they can progress beyond conditional approval.
Coinbase first submitted its application in October 2023, joining other crypto firms such as Ripple in seeking similar structures. While Circle, BitGo, Paxos Trust Company, and Fidelity Digital Assets all received OCC approvals last December, each entity faces its own set of operational hurdles before achieving full-scale trust operations. The process is neither automatic nor guaranteed; failure to meet the OCC’s standards could stall or even derail final approval.
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Why OCC’s Move Matters Now
The timing of this conditional approval comes as federal oversight of digital asset custody intensifies across the United States. In January 2024 alone, Coinbase launched prediction market bets for U.S.-based users through a partnership with Kalshi—a sign that product innovation continues even amid regulatory flux. Meanwhile, EDX Markets (backed by Citadel Securities) has filed for a similar national trust structure this year, highlighting industry momentum toward federally supervised custody solutions.
As reported by coindesk.com, the charter would allow Coinbase to hold digital assets on behalf of clients nationwide without relying solely on state-by-state licensing regimes—a significant operational shift for an exchange that currently manages billions in assets for institutional investors. The GENIUS Act passed last year further cements the OCC’s role in supervising stablecoin issuers and recognizing national trust banks as eligible entities for these activities.
For context: Anchorage Digital became the first federally chartered digital asset bank in 2021. Since then, at least five major crypto firms have received some form of OCC trust company approval—underscoring how quickly federal frameworks are evolving compared to just three years ago.
What’s Next for Coinbase’s Charter
Looking ahead, Coinbase must now focus on meeting all outstanding conditions set by the OCC before its national trust charter becomes fully operational. This includes recruiting key compliance staff and demonstrating effective risk controls—steps that may take months or longer depending on regulatory feedback and internal readiness. Until then, Coinbase will remain under the supervision of New York regulators via its BitLicense and limited-purpose state trust charter issued back in 2018.
It remains uncertain when—or even if—the conditional approval will convert into a full charter. But with growing institutional demand for secure crypto custody and ongoing efforts by firms like Ripple and EDX Markets to secure similar structures in 2024, competition among federally supervised custodians is set to intensify.
Developments to follow
If Coinbase meets the OCC’s additional requirements—such as building compliance systems, hiring key personnel, and passing regulatory reviews—it will receive a full national trust company charter, immediately allowing it to operate a federally regulated non-insured trust for digital asset custody; the timeline for satisfying these conditions remains unclear.