U.S. Bank Lobbyists Urge OCC to Reject Coinbase’s Trust Charter Application

A leading U.S. banking group has urged federal regulators to block Coinbase’s application for a national trust charter, escalating tensions between traditional finance and the crypto industry. The Independent Community Bankers of America (ICBA) submitted a letter to the Office of the Comptroller of the Currency (OCC), arguing that Coinbase’s proposed trust bank fails to meet multiple statutory requirements and poses significant risks to financial stability.

The ICBA claimed Coinbase’s trust would struggle to remain profitable during prolonged crypto downturns, and that the OCC could face major challenges in unwinding operations if it failed. The group further criticized Coinbase’s risk and compliance structures as “demonstrably flawed” and questioned the legitimacy of the OCC interpretive letter supporting the application. It urged regulators to either deny the charter outright or hold a public hearing for greater transparency.

This move follows similar objections from the Bank Policy Institute (BPI), which recently opposed trust applications from crypto firms including Ripple, Circle, and Paxos, alongside Coinbase. Both organizations argue that granting national trust charters to digital asset companies could endanger the U.S. banking system and set a troubling precedent.

In response, Coinbase’s Chief Legal Officer Paul Grewal accused traditional banks of attempting to “dig regulatory moats” to protect their dominance, asserting that opposing a regulated charter contradicts claims that crypto operates without oversight. Coinbase maintains that the charter would streamline compliance by allowing it to expand payment and settlement services nationwide without navigating 50 separate state regulations.

The OCC, now led by Jonathan Gould — a pro-innovation regulator with prior crypto industry experience — has yet to comment on the petitions. As Washington’s debate over digital assets intensifies, Coinbase’s bid could become a pivotal test of how far the U.S. will allow crypto firms into the regulated financial mainstream.