Coinbase has formalized its petition to obtain a federal “trust bank charter.” This action triggered immediate opposition from influential traditional banking associations. The Office of the Comptroller of the Currency (OCC), as the regulatory source, must now weigh Coinbase’s trust bank charter application and its impact on the payments system.
Various groups from the banking sector, such as the ICBA, BPI, and the ABA, have formally requested the OCC to deny the petition. The ICBA formalized its rejection this November 4, 2025, highlighting the urgency of its stance. Critics warn of “regulatory arbitrage,” as they fear Coinbase might access federal payment systems. This would happen without assuming the same obligations as traditional commercial banks.
Coinbase’s request responds to clear operational needs in the crypto market. It seeks to simplify the complex system of state licenses. Furthermore, it aims to offer regulated custody services and strengthen operations linked to stablecoins. Technically, these charters permit the fiduciary custody of assets but not loan issuance. They also do not enable FDIC-insured deposits, a key difference proponents use as an argument.
Are traditional banks ready for digital dollar competition?
The strategic interest behind Coinbase’s trust bank charter application is immense. A recent study estimates that up to $1 trillion could migrate from emerging market deposits to US stablecoins by 2028. Banks view this as a direct threat to their deposit base. On the other hand, other companies like Stripe, Circle, and Paxos are also exploring similar regulatory paths. This turns the debate into an institutional redefinition of the sector.
This dispute shapes the future payments infrastructure and the quality of institutional custody. The decision adopted by the OCC will be the next regulatory milestone that defines crypto integration. It will determine whether the federal framework facilitates or restricts digital asset providers’ access to existing payment systems. The outcome will directly affect the availability of tokenized dollar liquidity.
