- Coinbase’s pursuit of a federal bank charter marks a shift toward traditional finance amid a softening US regulatory stance on crypto firms.
- The STABLE and GENIUS Acts highlight diverging paths for US stablecoin regulation, balancing federal oversight and financial innovation.
- Increased charter interest by crypto firms signals a push to align with evolving US banking laws and gain trust in traditional financial systems.
Coinbase is allegedly looking toward obtaining a federal bank charter, according to a Cointelegraph post on X. The exchange would be able to provide loans, deposits, and other financial services according to the charter. This comes after cryptocurrency companies like Circle, Paxos, and BitGo showed increasing interest and are apparently looking for banking licensing. These licenses would allow them to behave similarly to mainstream lenders. But a federal bank charter is also accompanied by tighter oversight and regulatory expectations from US regulators.
Besides, Anchorage Digital already holds such a charter. Yet, it is currently under investigation by the Department of Homeland Security’s El Dorado Task Force. Moreover, at a time when the US government seems to be easing its position on crypto integration, there is a growing interest in banking charters. Jerome Powell recently recognized the increasing popularity and usefulness of stablecoins in traditional finance.
Regulatory Landscape Sparks Renewed Interest
Consequently, crypto firms may see this moment as ideal for aligning with US financial regulations. The Office of the Comptroller of the Currency had previously granted conditional approval to Paxos for a bank charter in 2021. Since then, the climate for regulatory engagement has evolved. Lawmakers are now actively shaping the future of stablecoin governance.
The US House Financial Services Committee passed the STABLE Act in April. It promotes federal oversight and stricter control over stablecoin issuance. It introduces a two-year moratorium on stablecoins backed by self-issued digital assets. It also mandates clear segregation of stablecoin reserves from corporate funds.
GENIUS Act Promotes Innovation and Compliance
Additionally, the GENIUS Act seeks a different approach. It blends federal and state regulations while positioning stablecoin issuers as financial institutions. The bill aims to enhance AML standards and liquidity rules. It also seeks to use stablecoins strategically to boost the US dollar’s global influence. Hence, the contrast between the STABLE and GENIUS Acts reflects competing visions of regulatory control versus innovation.
