Coinbase Bank License Move Could Disrupt Big Banks

Key Points

• Coinbase Bank License Move Could Disrupt Big Banks
• Coinbase applied for a federal trust charter via the OCC
• The license allows expansion into payments and trust services
• Company says it seeks oversight, not traditional banking status
• Critics say big banks fear competition from stablecoins

Coinbase has made a strategic move that could reshape the crypto industry’s relationship with traditional finance.

On October 3, Coinbase officially applied for a National Trust Charter (NTC) from the Office of the Comptroller of the Currency (OCC), a license usually granted to banks and fiduciary institutions.

If approved, this federal trust license would allow Coinbase to expand into payments and trust-based financial services, marking a key evolution in its business model.

What stands out is that Coinbase doesn’t want to be a traditional bank. Instead, the company is aiming for regulatory consistency across the United States, allowing it to better serve institutional clients and individual users alike.

“With crypto playing a bigger role in our everyday lives, it’s time for the clarity, consistency, and opportunity a federal-level charter affords,” said Paul Grewal, Coinbase’s Chief Legal Officer.

State-level charters and certifications have been instrumental as our business and the industry grew. But with crypto playing a bigger role in our everyday lives, it’s time for the clarity, consistency, and opportunity a federal-level charter affords. 2/3

— paulgrewal.eth (@iampaulgrewal) October 3, 2025

Coinbase already holds a limited-purpose trust charter in New York, but this federal-level charter would allow it to provide uniform services across all states.

It’s a move designed to eliminate the patchwork of state regulations that can slow innovation and confuse compliance efforts.

The Coinbase Bank License would open new doors, enabling the platform to introduce products like payments, yield-based services, and other advanced financial tools, all under one federally recognized umbrella.

This type of regulatory move also signals that large crypto firms are increasingly eyeing the institutional finance layer, much like how Ondo is targeting global markets by building real-world asset infrastructure.

Big Banks Are Nervous About the Coinbase Bank License

Coinbase’s move hasn’t gone unnoticed. Traditional financial institutions are sounding alarms, and for good reason.

Several major banks and banking associations have voiced concerns about granting Coinbase a bank-like status without subjecting it to full banking regulations.

The big banks are coming for another bailout by attacking crypto.

They don’t want you to earn rewards on your stablecoin holdings.

Our take: competition = better options for consumers.

If you wouldn’t ban credit card rewards, don’t ban crypto rewards. pic.twitter.com/ALu1luU7sx

— Coinbase 🛡️ (@coinbase) September 29, 2025

They warn that allowing crypto-native companies to operate like banks could destabilize existing systems and pull large sums out of traditional banking deposits, especially through high-yield stablecoin accounts.

But Coinbase is pushing back hard.

To counter this resistance, the company launched its “Stand With Crypto” campaign, designed to mobilize public support and pressure lawmakers. The campaign argues that banks are simply trying to protect their turf by blocking innovation that benefits everyday consumers.

CEO Brian Armstrong went so far as to call the banking industry’s stance “hypocrisy,” saying:

“Hypocrisy from banks is causing problems for crypto again. They’re just mad that they’re losing. Big banks don’t need another bailout; they need better products.”

Hypocrisy from banks is causing problems for crypto again.

Banks want to remove your ability to earn rewards when holding stablecoins.

Competition is good for consumers. They’re just mad that they’re losing.

Big banks don’t need another bailout, they need better products. pic.twitter.com/g3oVQPmrrr

— Brian Armstrong (@brian_armstrong) September 29, 2025

This growing tension comes as the entire crypto market is heating up. Bitcoin recently neared another all-time high, and institutional confidence continues to grow despite market fluctuations.

The battle over the Coinbase Bank License isn’t just a regulatory issue, it’s a power struggle between old finance and the new wave of digital assets.

What the Coinbase Bank License Means for Crypto’s Future

If granted, the Coinbase Bank License could mark a turning point—not just for Coinbase, but for the entire crypto ecosystem.

This isn’t just about offering more products. It’s about creating national regulatory clarity that allows crypto firms to compete on a level playing field with banks. And Coinbase isn’t alone.

Other major players like Circle and Ripple have made similar moves this year, applying for trust charters to solidify their presence in the evolving financial system.

The Coinbase Bank License would give the company access to broader financial tools, allowing it to handle everything from custody to transactions, all backed by federal oversight.

That’s a game-changer for institutional adoption and could accelerate the integration of blockchain-based services into the mainstream economy.

Even amid competition, Coinbase continues to differentiate itself by focusing on long-term regulation and infrastructure, while other platforms are trying to sustain user growth. For example, Hyperliquid lost 82% of its market share but remains a top pick for investors in the DeFi derivatives space.

For users, this means better security, improved services, and potentially new earning opportunities via compliant stablecoin and payment services.

For regulators, it offers a chance to bring crypto further under structured oversight, something that’s been missing from the US market until now.

And for banks, it means competition is only getting stronger.

Will Coinbase Replace Traditional Banks?

So, will Coinbase eventually replace banks?

Probably not in the traditional sense. The Coinbase Bank License does not transform the exchange into a full-service bank with lending capabilities, checking accounts, or FDIC insurance.

But it does give Coinbase a powerful position in the financial stack, especially in areas like asset custody, digital payments, and blockchain-based financial products.

In other words, Coinbase doesn’t need to become a bank to act like one.

The Coinbase Bank License is part of a broader trend in the crypto world: rather than work around regulation, leading firms are seeking to work within it, on their own terms.

We’re also seeing a rise in low-cap perpetual DEX tokens, which signal how retail and DeFi traders are also pushing toward more innovative and flexible financial products outside of centralized banking systems.

And as crypto markets grow in sophistication, with major players also preparing for volatility events like Bitcoin options expiry, the lines between traditional finance and decentralized innovation are becoming increasingly blurred.

Coinbase’s move signals that the next generation of finance won’t be either crypto or banks, it’ll be something in between.