The exchange Coinbase urged the OCC, Fed, and FDIC to confirm banks can offer crypto custody and execution services directly or through trusted third parties.
On Tuesday, Coinbase urged US financial authorities to revise or clarify their position regarding banks providing cryptocurrency services and collaborating with firms that deal in digital assets.
The exchange hopes to encourage banks to collaborate with cryptocurrency businesses to hasten the acceptance and integration of digital assets into conventional financial institutions. This would improve customer access and increase market liquidity, which would help the banking industry and the developing cryptocurrency market.
Coinbase wrote to regulators, requesting that they repeal regulations that unfairly restrict banking services for companies that provide crypto custody and execution services.
Faryar Shirzad, chief policy officer at Coinbase, commented, “Banking regulators have chosen to issue opaque, inconsistent guidance, leaving crypto C&E service providers and banks in regulatory limbo, instead of issuing clear, durable rules through the proper notice and comment process.”
To unlock bank partnerships in the cryptocurrency space, Coinbase demands clear regulations.
The letter asks the Federal Reserve, FDIC, and OCC to verify whether banks can offer crypto custody and execution services directly or through reputable third parties. It also calls for eliminating illegal and erratic obstacles that prevent C&E service providers from collaborating with banks.
Three top law firms said in a legal study provided to Coinbase that the existing limitations on crypto banking services are unlawful because they result from misunderstandings of legislation rather than explicit legislative requirements. They also underlined that only established regulations, not just recommendations, can provide the long-term legal clarity required to withstand political shifts.
According to the exchange, such stability is necessary to build a robust and creative financial system that benefits all Americans.
After years of overreach, cryptocurrency companies are calling for a regulatory overhaul.
To elevate crypto regulation to the top of the next administration’s agenda, the cryptocurrency industry contributed millions to assist Donald Trump’s reelection. The sector viewed this as a chance to change the regulatory environment following years of what businesses have criticized as overreach through stringent enforcement proceedings.
Crypto companies, meanwhile, asserted that supervisors of US banks made a conscious effort to isolate them from the conventional financial system. Regulators, however, flatly refuted these claims. Last month, the US Securities and Exchange Commission’s new leadership formed a task force to provide a thorough regulatory framework for cryptocurrency assets in response to the mounting calls for clarification.
Meanwhile, Trump named former PayPal executive David Sacks his “White House AI & Crypto Czar,” fulfilling his pledge to be a “crypto president.” The administration indicates its intention to change US digital currency policy with this action.
However, US bankers are still cautious of cryptocurrencies, which indicates a more considerable reluctance in conventional financial circles.
