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On Tuesday, Coinbase urged US banking regulators to clarify or revise their position regarding banks offering crypto services and collaborating with digital asset firms.
This initiative aims to encourage banks to partner with crypto companies, as such collaborations could accelerate the adoption and integration of digital assets into traditional financial systems. As a result, this could benefit both the banking industry and the developing crypto market by enhancing consumer access and increasing market liquidity.
In a letter addressed to regulators, Coinbase called for the removal of regulations that unfairly restrict banking services for crypto custody and execution service providers.
“Rather than providing clear, robust regulations through the appropriate notice and comment process, banking regulators have opted to issue vague, inconsistent guidance, leaving crypto C&E service providers and banks in a state of regulatory uncertainty,” stated Coinbase chief policy officer Faryar Shirzad.
Coinbase is making a significant move towards ending the debanking of crypto by urging @USOCC, @federalreserve, and @FDICgov to clarify that banks can engage in crypto activities and support the crypto community. For the past several years, US bank regulators have…
— Faryar Shirzad
(@faryarshirzad) February 4, 2025
Coinbase Advocates for Clear Regulations to Facilitate Bank Partnerships in the Crypto Sector
Specifically, the letter requests that the OCC, Federal Reserve, and FDIC confirm that banks can offer crypto custody and execution services either directly or through established third parties. Additionally, it calls for the removal of unlawful and inconsistent barriers that prevent C&E service providers from collaborating with banks.
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In a legal analysis shared with Coinbase, three prominent law firms argued that the existing restrictions on crypto banking services are unlawful, as they stem from misinterpreted regulations rather than clear statutory directives. They further stressed that only well-defined rules—not mere guidance—can provide the enduring legal clarity necessary to withstand political changes.
Ultimately, such stability is crucial for creating a resilient and innovative financial system that serves all Americans, the exchange stated.
Crypto Firms Advocate for Regulatory Reform Following Years of Overreach
The crypto industry contributed millions to support Donald Trump’s return to the White House, aiming to elevate crypto regulation on the new administration’s agenda. After years of what companies have criticized as overreach through stringent enforcement actions, the industry viewed this as an opportunity to reset the regulatory environment.
Meanwhile, crypto firms alleged that US bank regulators intentionally sought to exclude them from the traditional financial system. However, regulators firmly rejected these claims. In response to the growing calls for clarity, the new leadership at the US Securities and Exchange Commission established a task force last month to develop a comprehensive regulatory framework for crypto assets.
At the same time, Trump, who has pledged to be a “crypto president,” appointed former PayPal executive David Sacks as his “White House AI & Crypto Czar.” This appointment signals the administration’s intent to reshape US digital currency policy.
Nevertheless, US bankers continue to approach cryptocurrencies with caution, reflecting a broader reluctance within traditional financial circles.
The post Coinbase Calls on US Regulators to Enable Banks to Provide Crypto Services appeared first on Cryptonews.
