In a recent move, leading cryptocurrency exchange Coinbase has sent a letter to key US financial regulators, urging them to provide clarity on the status of banking services for crypto businesses. The exchange has asked the Office of the Comptroller of the Currency (OCC) to withdraw an interpretive letter that imposes barriers on banks entering the crypto market. Additionally, Coinbase has requested the Federal Reserve and the Federal Deposit Insurance Corp (FDIC) to confirm if state-chartered banks can offer custody and execution services for cryptocurrencies.
This proactive step by Coinbase comes at a crucial time, as the US Congress prepares for a hearing on “Operation Chokepoint 2.0,” which allegedly targets the crypto industry. Coinbase’s Chief Legal Officer, Paul Grewal, will testify alongside other prominent industry leaders, highlighting the need for clear regulations and a comprehensive ecosystem to support the growing crypto economy.
The lack of regulatory clarity has led to a “holding pattern” among US banks regarding crypto services. While financial institutions have participated in Bitcoin ETF markets, they have refrained from allowing retail transactions using crypto assets. The FDIC’s letters to certain banks, asking them to pause crypto-related activities, have further contributed to this uncertainty.
However, with the new crypto-friendly administration in place, there is hope for positive change. Bank of America CEO Brian Moynihan recently stated that the US banking industry will embrace digital asset payments if regulators allow it. The industry’s approach to digital assets could evolve, and major players like Bank of America are ready to enter the sector once regulations are clarified.
Coinbase’s push for regulatory clarity is a significant step towards creating a more conducive environment for crypto businesses and banking institutions. As the leading exchange takes the initiative to engage with regulators, it sets the stage for constructive discussions and potential policy changes that could unlock new opportunities for the crypto economy.
Tags: Coinbase, US regulators, crypto banking, regulatory clarity, Operation Chokepoint 2.0