Traditional banks pose obstacles to cryptocurrency’s pursuit of official regulatory acceptance

The Independent Community Bankers of America (ICBA) has stepped up its resistance to Coinbase’s bid for a national trust bank charter, portraying the move as an attempt by established banks to maintain their control over the market rather than to benefit consumers. In correspondence with the Office of the Comptroller of the Currency (OCC), the ICBA claimed that Coinbase’s plan relies on “unproven” risk management strategies and would face difficulties staying profitable during downturns in the crypto market, according to

. Paul Grewal, Coinbase’s chief legal officer, countered by accusing the banking association of favoring “regulatory barriers” instead of fostering innovation, remarking, “It’s hard to imagine objecting to a regulated trust charter simply because you’d rather see crypto remain... outside regulation,” as reported by .

This dispute highlights the ongoing friction between digital asset companies and legacy financial institutions as they vie to shape the rules for the crypto sector. Coinbase’s submission, made in October 2023, seeks to establish the

National Trust Company, a non-insured entity intended to broaden its custody offerings for both fiat and digital currencies, according to . The ICBA’s objections focus on doubts about the OCC’s capacity to safely wind down a crypto-centric trust in times of financial stress, pointing to the absence of a proven receivership process for such organizations, as noted by . Coinbase, meanwhile, has stressed that its application does intend to turn it into a bank, but rather to connect the crypto world with traditional finance under current legal standards, according to .

The regulatory standoff is unfolding as the Federal Reserve adjusts its policies. Recently, the U.S. 10th Circuit Court of Appeals upheld the Fed’s decision to deny Custodia Bank—a crypto-oriented bank—a master account, reinforcing the central bank’s discretion to prioritize stability over broader access, according to

. Fed Governor Christopher Waller has suggested a middle ground: “skinny master accounts” for fintech and stablecoin companies, which would allow restricted access to the Fed’s payment network under tight regulations, as reported by . This solution could enable crypto businesses to link with established financial systems while reducing systemic threats.

Coinbase’s latest earnings and strategic initiatives further demonstrate its expansion into mainstream finance. The platform posted $1.9 billion in revenue for Q3 2025, with net profits of $432.6 million, fueled by increased trading activity and a broader range of assets, according to

. In addition, Coinbase is close to finalizing a $2 billion purchase of BVNK, a stablecoin provider, to strengthen its business payment capabilities, as reported by . These moves are part of its larger plan to capitalize on regulatory certainty, as reflected in its support for the pending U.S. crypto market structure legislation, CoinPedia noted.

The OCC’s assessment of Coinbase’s trust charter request could last up to a year and a half, with similar proposals from Ripple, Circle, and others also awaiting decisions, according to eMarketer. Comptroller Jonathan Gould has advocated for allowing compliant fintechs into the banking sector, describing it as vital for ensuring fair competition. Nevertheless, the ICBA and other banking organizations persist in questioning the legal and operational soundness of crypto charters, arguing that the OCC’s interpretive actions have not undergone adequate public review, as American Banker reported.

As the discussion intensifies, the final decision will likely determine whether crypto companies can achieve federal recognition to compete head-to-head with traditional banks, or if regulatory hurdles will continue to serve as a shield for established players.