Top cryptocurrency brokerage firm Coinbase had a discussion with United States banking regulators on a possible way to obtain banking license according to an insider who claimed anonymity.
According to the report published by Wall Street Journal, one of the leading cryptocurrency trading firms had a meeting with the regulators at the United States Office of the Comptroller of the Currency (OCC) early this year, 2018 to discuss their readiness to apply for national banking charter in line with state-level financial regulations.
If this move sails through, it will help Coinbase to expand its ‘line of business to customers, and it will discontinue the step to partner with a bank for collaboration.
It will also help Coinbase’ marketing brand to lure big customer institutions into its’ platform. Already Coinbase has launched a wide range of products notably among them is “crypto asset custody” to attract institutional investors, of which many of them prefer custody partners who have banking licenses.
In a similar move, a report has it that, cryptocurrency financial services startup “ivyKoin” had a meeting with the officials of the Federal Deposit Insurance Corporation (FDIC) recently; a meeting that its’ president – Gary Fan publically confirmed.
However, getting a banking license could also subject these firms to be under new regulations which might offset the benefit of having such licenses.
The publication goes on to state the recent comment made by Comptroller of the Currency, Joseph Otting at an industry meeting last month saying that many fintechs come to them because of what they have heard of national banking charter that gives fintechs pre-emption across state lines. He went on to say what usually transpired when these fintechs come them, get to understand what it takes to be a bank and their strange looks and remarks that herald their leaving.
CCN reported of how Coinbase contacted SEC about becoming a registered broker-dealer. The company was among the only five fintechs granted BitLicense by New York regulatory body to facilitate cryptocurrency operations in this highly-regulated state.