Coinbase Eyes U.S. Bank Charter in Bid to Bridge Wall Street and Web3

Should Coinbase proceed and be approved, a federal banking charter would allow the company to offer a range of services typically reserved for traditional banks: holding customer deposits, issuing loans, and possibly accessing Federal Reserve payment systems directly. It would also reduce Coinbase’s dependency on third-party financial intermediaries, which has long been a vulnerability for crypto firms operating in a regulatory grey zone.

This isn't Coinbase’s first exploration into banking. In 2020, the company confidentially applied for a national bank charter but later pulled back. The renewed interest now comes at a time when regulators are showing signs of cautiously warming to regulated crypto-bank hybrids, particularly for firms that demonstrate compliance rigor.

Coinbase’s banking ambitions arrive amid tense regulatory relations with U.S. agencies. In mid-2024, the company filed Freedom of Information Act (FOIA) lawsuits against both the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC), alleging efforts to “weaponize the banking system” against crypto.

According to Coinbase, at least 20 examples surfaced in which the FDIC allegedly pressured banks to cut ties with digital asset firms. This, the company argues, has made it exceedingly difficult for exchanges, stablecoin issuers, and Web3 startups to maintain banking relationships.

The legal challenges are part of a broader campaign led by CEO Brian Armstrong to advocate for crypto-friendly regulation. Armstrong has called on U.S. lawmakers to remove choke points from the financial system and allow innovation to flourish domestically, rather than pushing it offshore.

In late 2023, Armstrong even met with Donald Trump to discuss the future of blockchain innovation in the United States. Trump’s administration has shown more openness to crypto, encouraging pro-growth reforms and seeking to retain fintech leadership on U.S. soil.

The timing of Coinbase’s consideration is strategic. Congress is currently reviewing two major stablecoin-related bills: the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act and the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. Both propose regulatory frameworks for stablecoin issuers, although they differ in approach to oversight, with the STABLE Act leaning more toward strict federal control.

Coinbase, as the issuer of the USDC stablecoin through its partnership with Circle, has a vested interest in these regulatory outcomes. A banking charter could potentially streamline its operations and compliance responsibilities under new laws.

Meanwhile, the OCC under Acting Comptroller Michael Hsu has taken a more conservative stance in granting bank charters to crypto companies. Hsu has emphasized the need for “guardrails” and supervision, particularly following the collapses of firms like Signature Bank and Silvergate, both of which had deep crypto exposure.

If Coinbase proceeds with a charter application, the process will likely be lengthy and complex, involving multiple layers of regulatory scrutiny. However, the potential payoff is significant: expanded services, greater institutional credibility, and stronger control over the financial stack.

Ultimately, the move would underscore Coinbase’s ambition to not just survive the regulatory gauntlet, but to help define the next chapter of the U.S. financial system itself.

As the crypto industry continues to mature, all eyes will be on whether Coinbase can successfully transition from an exchange platform into a regulated financial institution at the heart of both Web3 and traditional banking.