Coinbase is urging US banking regulators to clarify whether banks can provide cryptocurrency-related services. The exchange argues that clear regulations would allow financial institutions to offer custody and execution services for digital assets, either directly or through third-party partnerships. According to Coinbase, this move could enhance financial stability, increase liquidity, and improve consumer access to digital assets.
In a letter addressed to the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC), Coinbase is calling for the removal of regulatory barriers that prevent banks from engaging with crypto firms. The company claims that the lack of clear guidelines discourages traditional financial institutions from integrating crypto services, limiting innovation in the sector.
Coinbase criticizes the current regulatory environment, stating that instead of issuing clear and durable rules through the proper notice-and-comment process, banking regulators have provided inconsistent and opaque guidance. This uncertainty leaves both banks and crypto service providers in a difficult position, unsure of their legal standing when offering or partnering on digital asset services.
Faryar Shirzad, Coinbase’s Chief Policy Officer, highlighted this issue, stating that regulatory ambiguity is preventing the growth of the crypto industry within the traditional financial system. Without transparent and reliable guidelines, banks hesitate to engage with crypto firms due to the risk of unexpected enforcement actions or sudden policy shifts.
Coinbase also shared a legal review from three prominent law firms, which argued that the current restrictions imposed on crypto banking services are legally flawed. According to the review, these limitations arise from misinterpretations of existing regulations rather than clear statutory mandates. The legal experts emphasized that long-term clarity in the regulatory landscape is essential for ensuring financial stability and fostering innovation in the industry.
The broader crypto industry has been advocating for a regulatory overhaul, particularly after years of what many companies perceive as excessive enforcement actions. To address these concerns, the US Securities and Exchange Commission (SEC) recently formed a task force dedicated to developing a comprehensive framework for digital asset regulation.
Meanwhile, former President Donald Trump, who has pledged to be a pro-crypto leader, appointed ex-PayPal executive David Sacks as his White House AI & Crypto Czar. This move signals a potential shift in how digital asset policies will be shaped under a new administration. However, despite these developments, the US banking sector remains cautious about engaging with cryptocurrencies, reflecting the broader uncertainty surrounding the future of crypto regulation in the country.
