Coinbase Talks to U.S. Regulators About Acquiring Federal Banking License
The Wall Street Journal reported on May 18, Coinbase which is a major U.S. cryptocurrency exchange and wallet, addressed regulators about getting a government managing banking charter.
Quoting “a person familiar with the matter”, the WSJ reports that Coinbase addressed the U.S. Office of the Comptroller of the Currency (OCC) toward the start of 2018 both about a bank sanction and about their business plan.
A representative for Coinbase declined to remark on the gathering to the WSJ, however, included that the organization is “focused on working intimately with state and government controllers to guarantee we are legitimately authorized for the items and administrations we offer.”
Towards the start of April, the WSJ revealed that Coinbase was additionally looking into registering as an authorized brokerage firm and electronic-trading venue with the US Securities and Exchange Commission (SEC). Coinbase reported earlier this week that they are planning to launch a new line of products which targeted institutional investors like hedge funds.
As the WSJ calls attention to, a government banking permit would enable Coinbase to offer its own particular guardianship and payment services using an OCC limited-purpose charter, additionally helping the organization pull in more institutional clients.
It would likewise enable Coinbase to manage just a single federal controller, rather than a huge number of state ones, moreover offering clients governmentally safeguarded financial balances.
At a banking association meeting in April, the OCC’s Joseph Otting said that most of the FinTech firms that come in with the expectation of acquiring a banking charter to evade state directions do not follow through:
“When they come and they speak to us, and they understand what it really takes to be a bank, they kind of glaze over and often leave skid marks leaving the building.”
A hearing was held by the Subcommittee on Capital Markets, Securities on cryptocurrencies and Initial Coin Offerings (ICOs) in mid-March, with Coinbase’s Chief Legal and Risk Officer Mike Lempres as one of the four business witnesses.
Amid the hearing, Lempres alluded to the present US administrative framework for cryptocurrencies as “hurting sound development”, because of an absence of clarity.