Coinbase calls on U.S. gov to allow banks to enter crypto market: report

Coinbase is urging U.S. banking regulators to allow banks to offer cryptocurrency services, including trading and custody. 

The crypto exchange argued that current regulations create unnecessary hurdles preventing banks from fully entering the digital asset market, according to Bloomberg.

In a letter to the Office of the Comptroller of the Currency, the Federal Reserve, and the Federal Deposit Insurance Corporation, Coinbase called for changes that would make it easier for banks to partner with crypto firms. 

US banks need extra approval to engage with crypto

Specifically, Coinbase asked the OCC to withdraw a policy that it says imposes an extra layer of approval for banks looking to engage in crypto-related activities. It also urged the Federal Reserve and FDIC to confirm that banks under their supervision can both offer and outsource crypto services.

Banks have been hesitant to enter the crypto space due to regulatory uncertainty. Between 2022 and 2023, the FDIC reportedly told some financial institutions to pause or limit their crypto activities. This led banks to step back from offering digital asset services despite demand from institutional and retail investors.

Coinbase’s push comes as the regulatory environment shifts under President Donald Trump’s administration. Trump has appointed regulators seen as more open to crypto and recently repealed an SEC rule that made it costly for banks to offer crypto custody services.

The timing of Coinbase’s letter is notable as the Senate Banking Committee prepares for a hearing on “debanking”—the practice of cutting off financial services to certain industries, including crypto. Coinbase has long argued that restrictive banking policies make it difficult for crypto firms to access traditional financial services.

Coinbase’s request is backed by three major law firms, which argue that current laws already permit banks to engage with crypto firms. The OCC and FDIC declined to comment, and the Federal Reserve has not yet responded.