Coinbase cryptocurrency exchange is may be planning to further expand its cryptocurrency empire to include a conventional bank. Reports from Wall Street Journal reveal that crypto operators met with US financial regulators to discuss a banking license.
An anonymous source told WSJ that the cryptocurrency operator had a meeting with regulators at the US Office of the Comptroller of the Currency (OCC) earlier this year to access the option of applying for a national banking charter.
What a banking License means for Coinbase
With a banking license, Coinbase would have more freedom to offer more services and better serve their customers. The cryptocurrency exchange would no longer be constrained to working with only a few cryptocurrency-friendly banks.
As a bank, Coinbase would better position itself to partner and work with bigger institutions. Some of these institutions prefer relations with licensed bankers.
Building a Cryptocurrency Empire
Since the turn of the new year, Coinbase, currently valued at $1.6 billion, seems to be on a mission to grow its cryptocurrency empire within and outside the cryptocurrency community. With several high profile acquisitions and partnership deals, the exchange has shown its intent to become the “Google of Cryptocurrency” as explained by its executive, Adam White.
The latest in its efforts, Coinbase, last week released some new products aimed at institutional investors alongside its GDAX. Some of these products include a cryptocurrency asset custody, Coinbase Markets, and Coinbase Prime. It also opened up an office in Chicago to be closer to the CBOE and CME.
In its quest to grow its empire, Coinbase has shown willingness to abide by more conventional regulations. The cryptocurrency exchange reportedly explored the opportunity of becoming SEC licensed broker.
From Cryptocurrency operator to Banking
In a publication from the OCC released last month, the comptroller Joseph Otting explained that cryptocurrency operators are put off by the conditions for a banking charter. The publication quotes him as saying:
[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]“Most fintechs come to us because they have heard of this thing called a national banking charter that gives them pre-emption across state lines […] When they come and they speak to us, and they understand what it really takes to be a bank, they kind of glaze over and often leave skid marks leaving the building.”[/perfectpullquote]
The WSJ report also mentioned that ivyKoin, a cryptocurrency financial services startup, met with Federal Deposit Insurance Corporation (FDIC).
Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.