Banking group pushes back on Coinbase trust charter approval over consumer risks

The Independent Community Bankers of America (ICBA) has criticized the Office of the Comptroller of the Currency’s (OCC) conditional approval of a national trust bank charter for Coinbase, warning it could put consumers at risk.

In a statement issued this week, the advocacy group, which represents thousands of locally focused financial institutions across the US, argued Coinbase’s application failed to meet legal and regulatory standards and raised concerns about risk management, profitability, and oversight gaps for crypto firms.

“Today’s conditional approval of Coinbase’s trust charter application is a grave mistake that will only serve to put US consumers at risk,” Rebeca Romero Rainey, President and CEO of ICBA, stated.

This is not the first time ICBA has opposed Coinbase’s plan to create a national trust bank. Last November, the group issued a statement urging the OCC to reject Coinbase’s application, or, at minimum, require more disclosure and public scrutiny.

Despite the effort, the OCC granted the crypto firm conditional authorization.

“Coinbase is not becoming a commercial bank. We will not be taking retail deposits. We will not be engaging in fractional reserve banking,” Coinbase’s Greg Tusar stated.

The ICBA’s opposition is not entirely surprising.

After the OCC approved applications from crypto firms like Ripple and Circle, the ICBA joined other major US banking trade groups, including the American Bankers Association (ABA), in signing a letter urging the OCC to pause pending national trust bank applications.

According to the ICBA, the OCC is overstepping its authority under Interpretive Letter 1176. The group said fintech firms are effectively bypassing full banking regulation while gaining similar benefits, which could endanger consumers and introduce systemic risks.

The situation exacerbates existing tensions between traditional lenders and digital asset firms, which are still at odds over the CLARITY Act’s provisions on stablecoin yields. The banking industry fears such yields could draw funds away from traditional deposits.

Following early disagreements over the bill that led to the cancellation of a January committee meeting, progress resumed in late March when Senators Thom Tillis and Angela Alsobrooks negotiated a compromise text, achieving an agreement in principle with the White House.

Coinbase legal chief Paul Grewal told FOX Business this week that policymakers are “very close” to reaching an agreement on the CLARITY Act.

He noted the bill could soon advance, with a Senate Banking Committee markup potentially happening in the next few weeks, followed by a vote on the Senate floor.