CryptoSlate
Coinbase National Trust Company's federal charter took effect Nov. 6, and the Office of the Comptroller of the Currency authorized it to open on Nov. 9. The entity can provide cryptocurrency custody in a fiduciary capacity, with at least $60 million in tier 1 capital and a reserve covering 180 days of operating expenses during its first three years.
Why it matters
The approval moves Coinbase's institutional custody expansion beyond the OCC's April 2 preliminary decision. It gives the business a federal framework while keeping the new entity within trust-company operations and related activities in its business plan.
The OCC also approved an arrangement to transfer custody-service rights and responsibilities from Coinbase's New York trust company over time. The April plan envisioned moving the entire custody business during the national bank's three-year initial operating period. The public record does not identify completed client migrations.
Market impact
The charter gives Coinbase permission to offer federally supervised fiduciary custody, an institutional service that carries duties and standards of behavior. The authorization does not remove restrictions on the new entity's activities.
For its first three operating years, significant deviations from the business plan require 60 days' prior notice and written OCC non-objection. Those include material changes to products and services and any offering of transactional services to custody-account customers. The bank must also maintain prescribed liquid-asset buffers.
Frequently asked questions
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When can Coinbase's national trust company open?
The charter took effect Nov. 6, and the OCC authorized the company to open on Nov. 9.
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What custody services does the charter permit?
The approval permits cryptocurrency custody in a fiduciary capacity, subject to fiduciary duties and standards of behavior.
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Have Coinbase custody clients already moved to the national trust company?
The OCC approved a gradual transfer of accounts and assets from Coinbase's New York trust company, but the public record does not identify completed client migrations.
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What financial buffers must the new trust company maintain?
It must maintain at least $60 million in tier 1 capital, prescribed liquid-asset buffers and a reserve covering 180 days of operating expenses during its first three years.
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How does the OCC oversee changes to Coinbase's trust business?
During the first three operating years, significant deviations from the business plan require 60 days' prior notice and written OCC non-objection.
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