Coinbase Exec Slams Banks for Blocking Crypto Charter Bid

Coinbase Chief Legal Officer Paul Grewal publicly condemned traditional banking groups for opposing the crypto exchange’s national trust bank charter application, accusing them of prioritizing protectionism over consumer ￰3￱ pushback from banking associations intensified this week as both community banks and Wall Street lobbying groups mounted coordinated efforts to block crypto firms from securing federal banking ￰4￱ fired back after the Independent Community Bankers of America urged federal regulators to deny Coinbase’s charter application for its subsidiary, Coinbase National Trust Company. “ Imagine opposing a regulated trust charter because you prefer crypto to stay… unregulated ,” Grewal wrote on X, adding that bank lobbyists are attempting to “ dig regulatory moats to protect their own. “ Imagine opposing a regulated trust charter because you prefer crypto to stay … unregulated.

That’s ICBA’s position. It’s another case of bank lobbyists trying to dig regulatory moats to protect their ￰5￱ undoing a law to go after rewards to blocking charters, protectionism… ￰0￱ — ￰6￱ (@iampaulgrewal) November 4, 2025 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 application fails to meet statutory chartering standards on multiple ￰7￱ banking group’s letter claims the application exhibits fundamental deficiencies in governance, profitability, sustainability, and receivership complexity, particularly during crypto bear markets when both Coinbase and its subsidiary would face simultaneous financial ￰8￱ ICBA letter also challenges the legal validity of OCC Interpretive Letter 1176, which permits national trust banks to engage in non-fiduciary activities beyond traditional trust ￰9￱ urged the @USOCC to deny Coinbase’s application for a national trust bank charter for its subsidiary, Coinbase National Trust ￰10￱ application fails to meet statutory chartering standards and would set a dangerous precedent for the structure of the ￰11￱ system.… — Independent Community Bankers of America (@ICBA) November 4, 2025 The banking group contends that this interpretive letter was issued without the required public notice and comment procedures under the Administrative Procedure Act, rendering it legally invalid as a basis for Coinbase’s application.

Meanwhile, a separate banking lobby emerged in the stablecoin ￰12￱ 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 interest ￰13￱ coordinated response addresses what banks view as a “loophole” allowing digital asset platforms to circumvent the law by offering interest through affiliates rather than directly from stablecoin ￰14￱ Interest Debate Intensifies The banking associations warned that without a broad interpretation of the interest ban, digital asset platforms may exploit loopholes through high-yield rewards and incentives, which would undermine the law’s intent to keep stablecoins as payment tools rather than investment ￰15￱ Mike Rounds previously told Politico the interest workaround “looks like an end-run on the original legislation.” At the same time, Federal Reserve Governor Christopher Waller stated stablecoins should function as pure payment instruments, not interest-bearing deposits. “ It’s not an investment vehicle.

It’s not a time deposit where you’re holding it to earn interest ,” he ￰16￱ banking groups argue that interest-bearing stablecoins could trigger a 25.9% loss in bank deposits, eliminating approximately $1.5 trillion in lending capacity and shrinking small business and farm credit by $110 billion and $62 billion, ￰17￱ banks serving rural and underserved areas would face disproportionate impact from deposit outflows to yield-generating ￰18￱ Chief Policy Officer Faryar Shirzad dismissed the banking concerns, stating that the GENIUS Act explicitly permits third-party rewards programs and distinguishes them from issuer-paid ￰19￱ GENIUS Act is clear that rewards are ￰20￱ party rewards programs and interest paid by the issuer are not the same ￰21￱ answered this ￰22￱ @ABABankers letter admits as ￰23￱ of story. ￰1￱ — Faryar Shirzad (@faryarshirzad) November 4, 2025 “ Congress answered this question ,” Shirzad wrote , suggesting the banking industry’s letter acknowledges this distinction while attempting to reopen settled legislative ￰24￱ Process and Industry Implications The OCC is expected to take between 12 and 18 months to review Coinbase’s application, with public comments potentially influencing the agency’s ￰25￱ agency is currently led by Comptroller Jonathan Gould, a former chief legal officer of Bitfury, who has criticized the banking sector’s reluctance to work with crypto ￰26￱ Coinbase, similar opposition from the Bank Policy Institute targets trust charter applications from Ripple, Circle, and ￰27￱ Digital remains the only crypto firm with an approved national trust bank charter, granted in January ￰28￱ stablecoins become more integrated into the traditional financial system without full safeguards, crypto market shocks could infect the broader economy for the first ￰29￱ the latest from BPI: ￰2￱ — Bank Policy Institute (@bankpolicy) November 3, 2025 Looking forward, the concentrated wave of banking industry resistance shows that traditional financial institutions view crypto firms’ pursuit of federal charters as a fundamental threat to their competitive position in custody and payment services.