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Washington Just Handed Coinbase a Federal Banking License

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Coinbase received conditional approval from the Office of the Comptroller of the Currency (OCC) to charter Coinbase National Trust Company, giving the exchange a federal regulatory home for its custody business.

The OCC charter is structured for assets in safekeeping, not commercial banking. Coinbase will not take retail deposits or engage in fractional reserve banking under this framework.

What the OCC Charter Actually Covers

The approval targets Coinbase’s existing custody and market infrastructure operations. Federal oversight through the OCC replaces the patchwork of state-by-state rules that previously governed those services.

Greg Tusar, Co-CEO of Coinbase Institutional, outlined the scope directly in a company statement.

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“This charter is about bringing federal regulatory uniformity to the custody and market infrastructure business we have been building for years,” read an excerpt in the announcement, citing Tusar.

Conditional approval means Coinbase must still satisfy specific OCC requirements before the charter becomes fully active. The exchange confirmed it will work closely with OCC staff through that process.

What Stays the Same and What Opens Up

Coinbase’s 2015 New York Department of Financial Services (NYDFS) BitLicense and its existing state trust charter remain in place. Coinbase, Inc. continues to operate under NYDFS oversight without change.

The federal charter also creates a foundation for new payment products and related financial services. Tusar cited institutional partners and individual customers as the primary beneficiaries of that expanded capability.

Congress has advanced market structure legislation, but federal oversight for crypto custodians has remained fragmented. The OCC approval addresses that gap at the institutional level without waiting for full legislative action.

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The coming weeks will show how quickly Coinbase can satisfy the OCC’s conditions and whether other major exchanges pursue similar federal charters.

The post Washington Just Handed Coinbase a Federal Banking License appeared first on BeInCrypto.

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Crypto World

Stablecoins Dominate Crypto Trading as Retail Activity Drops: CEX.io

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Stablecoins Dominate Crypto Trading as Retail Activity Drops: CEX.io

Stablecoins were a rare bright spot in an otherwise subdued crypto market in the first quarter, with supply growth and transaction activity pointing to sustained demand even as broader market conditions weakened.

Total stablecoin supply increased by roughly $8 billion to a record $315 billion in Q1, according to data from CEX.IO. Although this marked the slowest pace of expansion since Q4 of 2023, it still represented growth during a period when the wider crypto market contracted.

The data suggests investors rotated into stablecoins as a defensive strategy, boosting their share of overall market activity. Stablecoins accounted for 75% of total crypto trading volume during the quarter — the highest level on record.

Stablecoins’ share of total digital asset trading volume exceeded its 2022 peak. Source: CEX.io

At the same time, total stablecoin transaction volume topped $28 trillion, underscoring their growing role as the primary liquidity layer of the digital asset market. The figure extends a multi-year surge in activity, with stablecoin volumes in recent years exceeding those of major payment networks like Visa and Mastercard combined.

However, data on underlying activity painted a more nuanced picture.

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Retail-sized transfers — typically associated with individual users — declined by 16% in the first quarter, the steepest drop on record. In contrast, automated activity surged, with bots accounting for approximately 76% of all stablecoin transaction volume.

The shift toward bot-driven flows suggests that a growing share of stablecoin usage is tied to algorithmic trading, arbitrage and liquidity provisioning, rather than retail demand. While elevated automation can reflect more sophisticated or institutional participation, it may also signal weaker organic demand during bearish market conditions. 

Related: Circle shares surge as Bernstein sees upside from stablecoin adoption

Divergence between major stablecoin issuers

One of the CEX.io report’s key takeaways was a widening divergence between major stablecoin issuers. The supply of Circle’s USDC (USDC) grew by roughly $2 billion in the first quarter, while Tether’s USDt (USDT) declined by about $3 billion, marking the first notable split between the two since Q2 of 2022 amid the bear market.

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The trend aligns with earlier Cointelegraph reporting, which highlighted a surge in USDC transfer activity in February, pointing to increased usage across trading and onchain transactions.

USDC is now more widely used for “financial operations,” which include trading and onchain transactions. Source: CEX.io

Beyond USDC, much of the growth in stablecoin issuance was driven by yield-bearing products — a segment that has drawn increasing scrutiny in the US. Ongoing discussions around a crypto market structure bill in Congress have placed yield at the center of debate, with traditional banks pushing back against stablecoins that offer interest-like returns.

The market for yield-bearing stablecoins is currently valued at around $3.7 billion, with daily trading volumes exceeding $100 million, according to data from CoinGecko.

Related: Crypto Biz: Stablecoin jitters meet institutional momentum