Coinbase in Discussion With U.S Regulators to Acquire a Federal Banking License
Coinbase, one of the world’s largest cryptocurrency exchange is giving a serious push to establish itself as a dominant player in the crypto service industry. In the past few months, the company has been seen unveiling several new products and services to cater to retail and institutional players in the crypto space.
According to the latest report from The Wall Street Journal, the exchange is currently in talks with the regulators at the US Office of the Comptroller of the Currency (OCC) for a Federal banking license that helps it to overcome the process of applying for state-level regulations every time.
The WSJ report states: “Coinbase Inc. and another cryptocurrency firm talked to U.S. regulators about the possibility of obtaining banking licenses, a move that would allow the startups to broaden the types of products they offer.”
In addition to expanding its services, the banking license will help Coinbase to eliminate the need for finding a banking partner every time who is willing to work with a company providing crypto trading services.
However, the Department of Financial Services issued has issued “Virtual Currency License” to Coinbase last year in Jan 2017, which allows it operate in New York in order to process payments through banks.
A spokesperson from Coinbase has refused to comment at the moment but has added 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 cryptocurrency exchange has already released a suite of products, recently, for institutional investors. In last week, the company made an official announcement where it tweeted saying: “As institutions continue to enter the cryptocurrency market, we are committed to building the products and services that uniquely meet their needs.”
During a banking meeting association in April, the OCC’s Joseph Otting said “Most fintechs come to us because they have heard of this thing called a national banking charter that gives them pre-emption across state lines. 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.”
In addition to Coinbase, there is another company called Ivy Koin LLC which is seeking banking licenses. Coinbase, on the other hand, has also approached the SEC for becoming a registered broker-dealer.