- Coinbase is urging US regulators to clarify rules allowing banks to offer crypto services.
- The exchange believes clearer regulations will foster stronger partnerships between banks and crypto companies, boosting market growth.
In a bold move to advance the integration of digital assets into the traditional banking system, Base has urged US regulators to clarify their stance on banks offering crypto services. The exchange wants the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) to officially confirm that banks can provide crypto custody and execution services, either directly or through established third parties.
Coinbase Seeks to Overcome Barriers in Crypto-Banking Partnerships
Coinbase’s request is aimed at breaking down barriers that have stifled crypto partnerships with banks. The company argues that such collaborations could help accelerate the adoption of digital assets while improving liquidity and consumer access. However, the lack of clear and consistent regulatory guidelines has left both banks and crypto service providers in a state of uncertainty.
In a letter addressed to regulators, Coinbase’s chief policy officer, Faryar Shirzad, expressed frustration over the current state of regulatory guidance. Shirzad pointed out that, instead of issuing clear rules through the proper channels, regulators have provided vague and inconsistent guidance. This has created confusion and left crypto custody and execution (C&E) service providers struggling to navigate the regulatory landscape.
Coinbase Seeks Legal Support for Change
To address these challenges, Coinbase is calling for the removal of the existing rules that limit banking services for crypto companies. The exchange argues that the current restrictions stem from misinterpreted regulations and not from well-defined statutory mandates. In support of its position, Coinbase shared a legal review from three top law firms, which emphasized that lasting legal clarity can only be achieved through formal rules, not ambiguous guidance.
Calls for Regulatory Overhaul
The regulatory landscape surrounding crypto and banking services has been a topic of significant debate. Some in the crypto industry have accused US regulators of deliberately trying to cut them off from the traditional financial system. These accusations have fueled calls for a regulatory overhaul, with many in the industry pushing for clearer, more favorable rules to foster growth and innovation.
Political Influence and Future Policies
The crypto sector has also contributed financially to political efforts, particularly in support of Donald Trump’s return to the White House. Many see this as a way to push for crypto-friendly policies under the new administration. Trump, who has promised to be a “crypto president,” recently appointed David Sacks, a former PayPal executive, as the White House’s “AI & Crypto Czar.” This move signals the administration’s intention to reshape the US’s approach to digital currency policy.
Banking Caution in the Crypto Space
Despite the growing pressure, US bankers remain cautious about embracing cryptocurrencies. The reluctance of traditional financial institutions to fully integrate with the crypto space highlights the broader hesitancy within the sector. However, Coinbase’s call for clear regulations could mark a turning point, potentially opening the door for stronger collaboration between banks and crypto companies in the near future.
