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Crypto Reporter
Shalini Nagarajan
Crypto Reporter
Shalini Nagarajan
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Coinbase on Tuesday called on US banking regulators to clarify or update their stance on banks offering crypto services and partnering with digital asset companies.
The exchange aims to spur banks to partner with crypto companies, as these collaborations could accelerate the adoption and integration of digital assets into traditional financial systems. Consequently, this would benefit both the banking sector and the evolving crypto market by improving consumer access and boosting market liquidity.
In a letter to regulators, Coinbase urged them to remove rules that unjustly limit banking services for crypto custody and execution service providers.
“Instead of issuing clear, durable rules through the proper notice and comment process, banking regulators have chosen to issue opaque, inconsistent guidance, leaving crypto C&E service providers and banks in regulatory limbo,” Coinbase chief policy officer Faryar Shirzad wrote.
Coinbase Demands Clear Regulations to Unlock Bank Partnerships in Crypto Space
Specifically, the letter calls on the OCC, Federal Reserve and FDIC to confirm that banks can provide crypto custody and execution services either directly or via established third parties. Additionally, it urges the removal of unlawful and inconsistent barriers that hinder C&E service providers from partnering with banks.
In a legal review shared with Coinbase, three leading law firms contended that the current restrictions on crypto banking services are illegal, as they arise from misinterpreted regulations rather than clear statutory mandates. They further emphasized that only well-established rules—not mere guidance—can offer the lasting legal clarity needed to endure political changes.
Ultimately, such stability is essential for creating a resilient and innovative financial system that serves all Americans, the exchange said.
Crypto Firms Urge a Regulatory Overhaul After Years of Overreach
The crypto industry donated millions to support Donald Trump’s return to the White House, aiming to push crypto regulation to the top of the new administration’s agenda. After years of what companies have decried as overreach through heavy enforcement actions, the industry saw this as an opportunity to reset the regulatory landscape.
Meanwhile, crypto firms claimed that US bank supervisors deliberately tried to cut them off from the traditional financial system. However, regulators firmly denied these allegations. In response to the growing calls for clarity, the new leadership at the US Securities and Exchange Commission established a task force last month to develop a comprehensive regulatory framework for crypto assets.
At the same time, Trump, who has vowed to be a “crypto president,” appointed former PayPal executive David Sacks as his “White House AI & Crypto Czar.” With this move, the administration signals its intent to reshape US digital currency policy.
Nevertheless, US bankers continue to approach cryptocurrencies with caution, reflecting a broader hesitancy within traditional financial circles.
