Coinbase demands that US regulators eliminate all obstacles that prevent banking institutions from providing services to cryptocurrency companies. The exchange maintains existing financial regulations impair banks from offering custody services and trading execution for digital assets. The initiative emerges during active debates about banking institutions’ role in the developing crypto market.
Coinbase Requests Clear Banking Regulations
The regulatory bodies including the Office of the Comptroller of the Currency (OCC) Federal Reserve Board of Governors and Federal Deposit Insurance Corporation (FDIC) need to define rules regarding crypto banking services according to Coinbase. According to Coinbase, the OCC interpretive letter puts obstacles in the way of banks who want to serve the digital asset market, as reported by Bloomberg on February 4
The exchange needs verification from both the Federal Reserve and FDIC regarding the ability of state-chartered banks to maintain crypto custody relationships with external providers. Legal experts believe existing legal statutes allow banks to offer these services however full confirmation from authorities will make institutions more comfortable to join.
Regulatory Concerns and Legal Challenges
The company Coinbase has been actively taking part in court battles about crypto companies obtaining sufficient banking services. Before this Coinbase filed a lawsuit against both the FDIC and the US Securities and Exchange Commission and accused them of working together to stop digital asset firms from accessing vital banking services. The Federal Deposit Insurance Corporation issued requests to financial institutions which ordered them to suspend their cryptocurrency operations according to confidential internal documents.
Faryar Shirzad the chief policy officer of Coinbase made it clear that regulatory clarity should be established. The appropriate regulatory guidance should state banks can rely on third-party providers for trading and exchange services for their customers according to Shirzad.
Shifting Crypto Policies Under the New Administration
The new presidential administration has initiated modifications to US regulatory guidelines that govern cryptocurrencies. A change occurred in banking restrictions regarding crypto services when SAB 121 was repealed by regulatory agencies as an anti-cryptocurrency policy.
Coinbase works toward securing regulatory modifications that would unlock bank involvement in the cryptocurrency field. Through active legislative discourse, the company pushes toward improved relations between traditional financial systems and digital assets. The company submitted its latest request to regulators as the Senate holds a hearing concerning the banking issues experienced by cryptocurrency organizations.
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