Coinbase Exec Slams Banks for Blocking Crypto Charter Bid
Coinbase Chief Legal Officer Paul Grewal publicly condemned conventional banking teams for opposing the crypto trade’s nationwide belief financial institution constitution utility, accusing them of prioritizing protectionism over client safety.
The pushback from banking associations intensified this week as each group banks and Wall Street lobbying teams mounted coordinated efforts to dam crypto companies from securing federal banking licenses.
Grewal fired again after the Independent Community Bankers of America urged federal regulators to disclaim Coinbase’s constitution utility for its subsidiary, Coinbase National Trust Company.
“Imagine opposing a regulated belief constitution since you choose crypto to remain… unregulated,” Grewal wrote on X, including that financial institution lobbyists are trying to “dig regulatory moats to guard their very own.“
Banking Groups Mount Coordinated Opposition
The ICBA submitted a detailed opposition letter to the Office of the Comptroller of the Currency on November 3, arguing that Coinbase’s utility fails to fulfill statutory chartering requirements on a number of grounds.
The banking group’s letter claims the appliance reveals elementary deficiencies in governance, profitability, sustainability, and receivership complexity, significantly throughout crypto bear markets when each Coinbase and its subsidiary would face simultaneous monetary stress.
The ICBA letter additionally challenges the authorized validity of OCC Interpretive Letter 1176, which allows nationwide belief banks to have interaction in non-fiduciary actions past conventional belief providers.
The banking group contends that this interpretive letter was issued with out the required public discover and remark procedures beneath the Administrative Procedure Act, rendering it legally invalid as a foundation for Coinbase’s utility.
Meanwhile, a separate banking foyer emerged within the stablecoin debate.
The American Bankers Association and 52 state banking associations submitted a joint letter to the Treasury Department on November 4, urging strict enforcement of the GENIUS Act’s prohibition on stablecoin curiosity funds.
The coordinated response addresses what banks view as a “loophole” permitting digital asset platforms to avoid the regulation by providing curiosity by way of associates reasonably than instantly from stablecoin issuers.
Stablecoin Interest Debate Intensifies
The banking associations warned that and not using a broad interpretation of the curiosity ban, digital asset platforms might exploit loopholes by way of high-yield rewards and incentives, which might undermine the regulation’s intent to maintain stablecoins as fee instruments reasonably than funding autos.
Senator Mike Rounds beforehand told Politico the curiosity workaround “seems like an end-run on the unique laws.”
At the identical time, Federal Reserve Governor Christopher Waller acknowledged stablecoins ought to operate as pure fee devices, not interest-bearing deposits.
“It’s not an funding automobile. It’s not a time deposit the place you’re holding it to earn curiosity,” he stated.
The banking teams argue that interest-bearing stablecoins may set off a 25.9% loss in financial institution deposits, eliminating roughly $1.5 trillion in lending capability and shrinking small enterprise and farm credit score by $110 billion and $62 billion, respectively.
Community banks serving rural and underserved areas would face disproportionate influence from deposit outflows to yield-generating stablecoins.
Coinbase Chief Policy Officer Faryar Shirzad dismissed the banking considerations, stating that the GENIUS Act explicitly permits third-party rewards packages and distinguishes them from issuer-paid curiosity.
The GENIUS Act is obvious that rewards are allowed. Third occasion rewards packages and curiosity paid by the issuer aren’t the identical factor. Congress answered this query. The @ABABankers letter admits as a lot. End of story. https://t.co/CMKqgDsWcO
— Faryar Shirzad
(@faryarshirzad) November 4, 2025
“Congress answered this query,” Shirzad wrote, suggesting the banking trade’s letter acknowledges this distinction whereas trying to reopen settled legislative intent.
Review Process and Industry Implications
The OCC is predicted to take between 12 and 18 months to assessment Coinbase’s utility, with public feedback probably influencing the company’s choice.
The company is at present led by Comptroller Jonathan Gould, a former chief authorized officer of Bitfury, who has criticized the banking sector’s reluctance to work with crypto corporations.
Beyond Coinbase, comparable opposition from the Bank Policy Institute targets belief constitution functions from Ripple, Circle, and Paxos. Anchorage Digital stays the one crypto agency with an accredited nationwide belief financial institution constitution, granted in January 2021.
Looking ahead, the concentrated wave of banking trade resistance reveals that conventional monetary establishments view crypto companies’ pursuit of federal charters as a elementary menace to their aggressive place in custody and fee providers.
The submit Coinbase Exec Slams Banks for Blocking Crypto Charter Bid appeared first on Cryptonews.
