Coinbase seeks a national trust bank license, aiming to expand its institutional custody business without the ability to make loans or take deposits. Known as a special-purpose national bank charter, this license allows firms to custody and manage stablecoin reserves, pegged to dollar or gold values. President Trump recently signed legislation supporting dollar-pegged payment stablecoins.

Anchorage Digital is the only crypto firm currently holding a national trust bank license, with others like Circle, Ripple, Bitgo, and Paxos applying. However, banks and lobbyists are concerned about these applications, questioning the motivations and business models of the applicants. Coinbase emphasizes that the license is vital for its custody business, not to become a full-service bank.

Coinbase is already offering crypto financial services to major US banks and dozens of financial institutions. It recently partnered with PNC Financial Services Group and JPMorgan Chase to allow customers to buy, sell, and hold crypto. CEO Brian Armstrong aims to provide a one-stop shop for various crypto services, including lending products like borrowing stablecoins using bitcoin as collateral.

Armstrong has rejected the notion of Coinbase becoming a bank, emphasizing its focus on crypto services. The company is actively mobilizing crypto enthusiasts against the banking industry’s attempts to restrict its ability to offer interest-bearing stablecoins. Coinbase aims to be a bank replacement for people and continues to push back against perceived banking industry hypocrisy.

Read more at Yahoo Finance: Coinbase applies for federal trust banking license, says ‘we have no ambitions to be a bank’