Coinbase Advocates for Clear and Consistent Crypto Banking Rules
Tl;dr: Coinbase is committed to regulatory clarity and lawful access to crypto services across banking providers. To support this, we’re renewing our long-standing request that the federal banking regulators – the OCC, Federal Reserve, and FDIC – 1) update guidance that allows banks to offer crypto custody and execution (C&E) services directly or through third parties like Coinbase and 2) remove inconsistent regulatory roadblocks that are preventing lawful crypto actors from working with banks. Three law firms have validated the arguments in our letter in a legal analysis explaining why federal banking rules that have restricted access to crypto were adopted improperly.
Coinbase has always believed that consumers should have the freedom to store their assets with institutions they trust, whether that's traditional banks or specialized crypto providers - that’s how we will lead to more economic freedom in the world. By enabling banks to engage with new technology either directly or through third-party services (as the American Bankers Association supported in 2022 with NYDIG), we can create a more inclusive financial environment and strengthen overall system safety through proper oversight and integration.
That’s why we are taking a proactive step to advance the integration of digital assets into the traditional banking system. Yesterday, we sent a letter to the Office of the Comptroller of the Currency (OCC), Federal Reserve, and Federal Deposit Insurance Corporation (FDIC), calling for updated guidance on crypto custody and execution services (C&E). Our letter also urges action to eliminate rules that wrongfully restrict access to banking services for C&E providers.
The Need for Regulatory Clarity
The crypto industry has evolved significantly over the past decade, yet banking regulators haven't kept pace. In an effort to better understand the guardrails for partnering with crypto providers, banks have consistently asked for clear rules established through proper notice and comment procedures – regardless of which administration is in power. This approach, which Coinbase has long supported across all regulatory bodies, including the SEC and CFTC, ensures transparency, a proper democratic process, and makes the system safer for everyone. Instead of issuing clear, durable rules through the proper notice and comment process, banking regulators have chosen to issue opaque, inconsistent guidance, leaving crypto C&E service providers and banks in regulatory limbo.
Our Proposal for Change
A durable framework is key to lasting reform. Durability is only possible if banking regulators commit to establishing clear laws implemented through the democratic channel of a notice and comment period rather than interpretative guidance. This approach is designed to withstand changes in political administration and ensure uniform application across the industry.
Specifically, our letter urges the OCC, Federal Reserve, and FDIC to:
Confirm that banks are permitted to offer crypto C&E services either directly or through established third parties
Remove unlawful, inconsistent impediments for C&E service providers to partner with banks
Legal Foundation for Reform
In a legal analysis shared with us, three prominent law firms asserted that current limitations on crypto-related banking services are unlawful, stemming from improper regulatory interpretations rather than statutory requirements. Properly established rules – not just guidance – provide the legal certainty that withstands the test of time, regardless of political shifts. This durability is crucial for building a stable, innovative financial system that serves all Americans.
Path Forward
As the new Administration shapes its approach to digital asset regulation, Coinbase remains committed to constructive dialogue with regulators. We believe that clear, durable rules, established through proper democratic channels, will benefit all stakeholders – from traditional banks to crypto companies, and most importantly, the consumers we serve.
We look forward to continuing to engage with regulators, banking partners, and other stakeholders as we work toward a more fair, just, and innovative financial system. For more details, read the full text of our letter and the accompanying legal analysis.
About Faryar Shirzad
Faryar Shirzad is the Chief Policy Officer at Coinbase, where he leads the company’s engagement with policymakers around the world. Before joining Coinbase, Faryar was Global Co-Head of Government Affairs at Goldman Sachs. He has also served in various roles in the U.S. government, including deputy national security advisor for international economic affairs for President George W. Bush. Faryar earned a JD from the University of Virginia School of Law, an MPP from the John F. Kennedy School of Government at Harvard, and a Bachelor of Science degree from the University of Maryland, College Park.
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