Coinbase May Get a Banking License

Coinbase is looking for opportunities to become more attractive to large investors, expand the range of services and abandon the need to look for intermediaries among banks loyal to cryptocurrency trading, all of which can be provided by a banking license.

Having a banking license allows the exchange to deal with only one federal regulatory body, as well as offer users federally insured bank accounts.

At the beginning of the year, representatives of the Coinbase cryptocurrency exchange held a meeting at the American Office of the Comptroller of the Currency (OCC), during which they discussed the conditions for obtaining a national banking license. The trading platform's press service has not yet officially commented on the results of the negotiations.

In early April, the WSJ reported that Coinbase was also exploring the possibility of registering as a licensed brokerage firm and electronic trading platform with the US Securities and Exchange Commission (SEC). In March of this year, the exchange received a license for electronic money from the British Financial Conduct Authority. This license allows the company to provide payment services and issue an alternative digital currency that can be used to make card, telephone and Internet payments. The license is valid in 23 EU member states. Thus, the exchange expanded its presence in the UK and Europe. For US users on March 12, the company launched a tax reporting tool that will automatically generate a form to report their cryptocurrency earnings.

This year, Coinbase has focused its resources on developing a range of products for institutional investors, such as hedge funds. In particular, the system for high-frequency trading is planned to be updated by the end of 2018. Support for HFT will help increase turnover and interest large institutional traders who are increasingly using cryptocurrency.

An OCC representative said at a banking association meeting in April that most fintech companies that apply for a banking license do not complete the process... Since the process of obtaining a national banking charter requires compliance with many imposed rules, going through a complex licensing procedure and positioning the company as a bank, which, in turn, leads to additional costs.