Coinbase clears key regulatory hurdle in bid to bolster its stablecoin business

In this article COIN .S. Office of the Comptroller of the Currency to operate as a trust bank, the company said Thursday. If finalized, the crypto exchange will be able to operate payment products in addition to its custody business under federal supervision, Coinbase chief legal officer Paul Grewal told CNBC. The company made clear it will not become a commercial bank, take retail deposits or engage in fractional reserve banking — the practice employed by big banks of keeping just a fraction of customers deposits in reserve while lending out the rest. Still, a trust charter would give it the legal authority, access to banking infrastructure and regulatory credibility to move, hold, and settle money more efficiently. "Over the long haul we will be able to explore, with the OCC, offering not just custody products but also other infrastructure products, particularly around payments, that we think will expand and extend crypto payments in all sorts of new and interesting and important directions," Grewal said. While trading for retail and institutional investors is Coinbase's core business, the company has been pushing to amplify consumer engagement through new products and services, taking advantage of pro-crypto policies under the Trump administration. The approval is a preliminary agreement that Coinbase's application meets key regulatory requirements, subject to fulfilling certain conditions before it can actually operate as a trust bank. Coinbase would be regulated directly by the OCC, one of the three main federal banking regulators, rather than be subject to state-based regulation, which is a major pain point for companies in fast moving industries like crypto. Up until this point, that's been "the only way to go about this," Grewal said, nodding to President Donald Trump's promise to make the U.S. the "crypto capital of the world" in his second term. The Biden Administration before it famously maintained an anti-crypto stance that the industry believes hampered...