Coinbase (COIN) said on Thursday that it had received initial approval for a national trust company charter from the U.S. Office of the Comptroller of the Currency, Bloomberg reported, marking a step toward operating it as a federally regulated cryptocurrency custodian.
Approval is not final. It is a conditional green light that sets out the requirements Coinbase must meet before it can receive full charter. These typically include creating compliance systems, hiring key personnel, and conducting regulatory reviews. The OCC also expects companies to demonstrate that they can manage risk, protect customer assets and follow anti-money laundering regulations. Only after completing those steps will the agency be able to grant full approval.
“We still need final approval…our business will not operate under an OCC statute until we have that final approval,” Paul Grewal, chief legal officer at Coinbase, told CoinDesk. “This next phase allows us to go into more detail about how we can expand our business in ways that are interesting and important to the development of cryptocurrencies.”
If finalized, the statute would allow Coinbase to run an unsecured domestic trust company. That structure allows the company to hold digital assets on behalf of clients, but prevents it from accepting deposits or making loans.
Coinbase first applied for the charter in October, along with companies like Ripple. More recently, Citadel-backed exchange EDX Markets said it had applied for a similar structure. The app group points to growing demand for regulated custody as large investors enter crypto markets.
For institutions, custody is less about commerce and more about trust. A pension fund, for example, may want exposure to bitcoin but needs a regulated entity to hold the asset securely. A federal charter can provide that assurance in a way that state licenses cannot.
The move aligns with Coinbase’s effort to become less reliant on trading fees, which can vary with market cycles. Custody offers more stable income. The company already acts as a custodian for several US spot bitcoin exchange-traded funds, holding the underlying assets on behalf of the fund managers.
“The big opportunity in the future would be payments… with adjacent but separate escrow,” Grewal said. “We believe we will be able to offer a much broader range of products and services to our customers than ever before.”
UPDATE (April 2, 16:57 UTC): Adds comments from Coinbase Chief Legal Officer Paul Grewal.
