Cryptocurrency exchange Coinbase Global (COIN) is seeking a national trust charter from the Office of the Comptroller of the Currency (OCC). The move would allow Coinbase to operate as a federally licensed trust bank to safeguard customer assets, settle transactions, and manage stablecoin reserves.
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Unlike a full-service bank charter, a national trust charter does not allow Coinbase to make loans or accept traditional deposits. Also, customer accounts are generally not covered by FDIC insurance.
Coinbase vice president of institutional product, Greg Tusar, clarified that the company has “no intention of becoming a bank” and is not pursuing a full-service national bank charter.
The company already operates under a limited-purpose trust charter from the New York Department of Financial Services, which allows it to offer custody services to investment advisers.
However, the federal charter would help the company simplify compliance by eliminating the need for multiple state licenses. Also, it would allow Coinbase to accelerate product development and speed up institutional adoption of digital assets.
Currently, only one crypto firm, Anchorage Digital, holds such a charter. Several firms, including Circle (CRCL), Ripple (XRP-USD), and Paxos, have filed similar applications this year.
Is COIN a Good Buy Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on COIN stock based on 15 Buys, 12 Holds, and two Sells assigned in the past three months. Furthermore, the average COIN price target of $380.38 per share implies 0.09% upside potential.
