The legal team at Coinbase recently confirmed that the Federal Deposit Insurance Corporation declined to approve its application for a crypto bank charter. This news aligns with ongoing caution by regulatory bodies even as the established exchange pushes for clearer banking pathways for digital asset firms.
Concerns over systemic risk were cited by the FDIC as well as consumer protection tied to crypto banking. Coinbase argues that being denied a charter as a US-based firm undermines leadership in the US and has the potential to hamper innovation.
This resistance comes as broader shifts in the market, such as earlier in 2025 when the FDIC rescinded guidance that required banks to obtain regulatory approval before engaging in crypto-related activities, a key barrier to entry for traditional institutions. Coinbase’s lawsuit additionally forced the release of previously confidential FDIC pause letters, which brought to light internal scrutiny of crypto-related activities throughout 2022 and 2023.
While US banking regulators are making positive signals around a greater openness to bank crypto services, Coinbase is stalled at the charter level. This illustrates the legacy friction that is sure to continue for the time being to slow down crypto firms’ transition into the traditional banking system.
