Major U.S. cryptocurrency exchange and wallet Coinbase addressed regulators about getting a federal banking charter according to report by the Wall Street Journal (WSJ) May 18.
Citing to “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 contract and about their business model.
A representative for Coinbase declined to comment on the meeting to the WSJ, yet included that the company is “committed to working closely with state and federal regulators to ensure we are properly licensed for the products and services we offer.” The OCC and Coinbase have not reacted to Cointelegraph’s request for comment by press time.
Toward the beginning of April, the WSJ reported that Coinbase was also looking into registering as an authorized brokerage firm and electronic-trading value with the US Securities and Exchange Commission (SEC). Recently, Coinbase had declared plans to launch another suite of products focusing on institutional investors like hedge funds.
As the WSJ brings up, a federal banking license would permit Coinbase to offer its own custody and payment services utilizing an OCC limited purpose charter, additionally helping the company to pull in more institutional clients. It would enable Coinbase to manage just a single federal regulator, instead of a large number of state ones, and also offer clients federally insured banks accounts.
Nonetheless, the OCC’s Joseph Otting said at a banking association meeting in April that most fintech firms that come in with the motives of acquiring banking charter to deter state regulations don’t 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.”
The U.S. government has as of late started looking more into regulations for cryptocurrencies, with the SEC launching a test into crypto businesses in the start of March. In mid-March, the Subcommittee on Capital Markets, Securities, and Investment held a hearing on cryptocurrencies and Initial Coin Offerings (ICOs), with Coinbase’s Chief Legal and Risk Officer Mike Lempres as one of the four business witnesses.
During the hearing, Lempres alluded to the present US regulatory system for cryptocurrencies as “harming healthy innovation”, because of an absence of clarity.