Coinbase Urges US Regulators to Greenlight Crypto for Banks

uk

  • Coinbase (COIN) is urging U.S. banking regulators to clarify their stance on banks offering crypto services, highlighting a need for regulatory support for partnerships between banks and crypto firms.
  • This push comes amidst political backing from the crypto industry for Trump’s administration, which has promised to prioritize crypto regulation with figures like David Sacks as ‘Crypto Czar’.
  • Despite industry allegations of exclusion, regulators have denied intentional efforts to bar crypto from banking, while the SEC has formed a task force to address crypto regulation.

Coinbase Global (COIN) has intensified its campaign for U.S. banking regulators to clarify or adjust their stance on banks providing services related to cryptocurrencies, advocating for partnerships between traditional banks and digital asset companies. This push comes as part of a broader industry effort to influence lawmakers to establish a supportive regulatory framework for the cryptocurrency sector, amid a backdrop where most U.S. banks have avoided engaging with crypto firms due to regulatory ambiguity.

Faryar Shirzad, Coinbase’s Chief Policy Officer, has publicly criticized U.S. bank regulators for what he describes as undemocratic and unilateral decisions that have essentially barred banks from crypto-related activities. He has used social media to call out the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC), urging them to allow banks to participate in the crypto economy. Despite these calls, responses from the regulators have been either non-committal or absent.

The crypto industry’s political influence has been on display with significant financial backing for Donald Trump’s return to the presidency, aiming to prioritize cryptocurrency regulation. Trump’s administration, with the appointment of David Sacks as “White House A.I. & Crypto Czar”, signals a potential shift towards a more crypto-friendly policy environment. However, despite these political developments, traditional U.S. bankers continue to approach cryptocurrencies with caution.

In response to accusations from crypto companies of being systematically excluded from the banking system, regulators have denied orchestrating such efforts. Meanwhile, the U.S. Securities and Exchange Commission has recently formed a task force dedicated to crafting a regulatory framework for crypto assets, indicating a move towards some level of regulatory clarity, though the outcomes of these efforts remain to be seen.

This call for regulatory clarity by Coinbase and others in the crypto sector reflects a critical juncture for the industry, where the balance between innovation, security, and regulatory compliance could determine the future trajectory of cryptocurrencies in the U.S. financial landscape.

WallStreetPit does not provide investment advice. All rights reserved.

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