Coinbase, as well as one other cryptocurrency company, has held talks with regulators in the U.S. about securing a banking license.
The Wall Street Journal, citing a person familiar with the matter, reported Coinbase, the operator of the largest cryptocurrency exchange in the U.S., held a meeting with officials from the U.S. Office of the Comptroller of the Currency in the early part of this year. At the same time ivyKoin, a payments startup, in recent weeks had meetings with officials from the Federal Deposit Insurance Corp. about the same topic. The executives didn’t only discuss obtaining a banking license at the meetings, the firms also discussed their business models, noted the Wall Street Journal. The companies may decide not to go after a bank charter, which would increase the regulatory scrutiny of their operations. If the benefits of operating a bank are more than the cost to do so, the cryptocurrency companies may move forward, noted the report. With the license, they can offer customers federal insurance bank accounts and other banking services instead of partnering with existing banks. A Coinbase spokeswoman didn’t comment about the meeting but told the Wall Street Journal the company is “committed to working closely with state and federal regulators to ensure we are properly licensed for the products and services we offer.” An OCC spokesman declined to comment.
Meanwhile, ivyKoin’s president, Gary Fan, told the paper it is working with banks instead of becoming one — but inquired with regulators about a banking license to understand what it takes if it decides down the road to apply for one, noted the WSJ. During the meeting they “talked about our business model, what we hope to accomplish, next steps for us, key risks and how we can help banks manage that,” he told the WSJ. “Our experience was really positive and [regulators] actually encouraged the discussion.” While an FDIC spokeswoman declined to comment on the meeting, she did tell the paper: “We encourage parties to have informational conversations on the application process.” The FDIC grants deposit insurance to new banks, noted the report.