Coinbase is urging US banking regulators to clarify and modernize their stance on banks offering crypto-related services and collaborating with digital asset firms. The exchange believes that fostering these partnerships will accelerate the integration of cryptocurrencies into the traditional financial system, benefiting both industries by enhancing consumer access, improving liquidity, and fostering financial innovation.
In a formal letter addressed to regulatory bodies, Coinbase called for the removal of restrictions that unfairly limit banks from providing services to crypto custody and execution (C&E) providers.
Coinbase Criticizes Regulatory Ambiguity
Faryar Shirzad, Coinbase’s Chief Policy Officer, criticized regulators for creating uncertainty by issuing inconsistent and vague guidance instead of formal rules developed through the proper legislative process.
“Rather than establishing clear, durable regulations through a transparent notice-and-comment process, banking regulators have opted for opaque, inconsistent guidance, leaving crypto custody and execution service providers—and banks—trapped in regulatory limbo,” Shirzad wrote.
This regulatory uncertainty, Coinbase argues, has made it difficult for banks to confidently engage with the crypto industry, slowing adoption and innovation.
Coinbase Calls for Action From OCC, Fed, and FDIC
The letter specifically calls on the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) to:
- Confirm that banks can provide crypto custody and execution services, either directly or through third-party partnerships.
- Eliminate restrictive barriers that have no clear legal foundation but still hinder crypto companies from accessing banking services.
A legal review conducted by three leading law firms and shared with Coinbase concluded that these restrictions lack a solid legal basis. The firms argued that the rules limiting crypto banking services are based on regulatory misinterpretations rather than explicit statutory mandates. They emphasized that only well-defined and legally grounded regulations—not informal guidance—can provide lasting clarity and withstand political shifts.
Coinbase contends that regulatory stability is critical for fostering a resilient and innovative financial system that benefits all Americans.
Crypto Industry Pushes for Regulatory Reset
Amid mounting frustrations over regulatory barriers, the crypto industry has ramped up efforts to influence policymaking. Many crypto firms have heavily invested in political lobbying, including millions of dollars in donations to support Donald Trump’s return to the White House. Industry leaders see this as an opportunity to push for regulatory reforms that could reverse what they describe as years of overreach and aggressive enforcement actions.
Crypto companies have also accused US banking supervisors of intentionally cutting them off from the traditional financial system, a claim regulators have repeatedly denied. In response to the growing demand for clarity, the US Securities and Exchange Commission (SEC) recently established a task force to develop a comprehensive regulatory framework for digital assets.
Trump’s Pro-Crypto Stance and the Future of Regulation
Signaling a potential shift in US crypto policy, Trump has positioned himself as a “crypto president”, pledging to create a more favorable regulatory environment for digital assets. In a strategic move, he appointed former PayPal executive David Sacks as the White House AI & Crypto Czar, underscoring the administration’s commitment to reshaping digital currency policies.
However, despite political momentum, US banks remain cautious about embracing cryptocurrencies. Many financial institutions continue to view the sector as high-risk, reflecting broader concerns within traditional finance.
The outcome of these regulatory battles will be crucial in determining the future of crypto-banking partnerships in the US. With Coinbase leading the charge, the industry is now at a pivotal moment, where government decisions could either open the floodgates for mainstream crypto adoption or reinforce barriers that keep digital assets on the fringes of traditional finance.