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Coinbase Urges US Regulators to Clear Path for Banks to Offer Crypto Services

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On Tuesday, Coinbase Global renewed its call for U.S. banking regulators to clarify or revise their stance on banks providing cryptocurrency services and forming partnerships with digital asset companies. The move comes amid a broader push by the crypto industry to lobby lawmakers for a regulatory framework that could foster the sector’s growth. Most traditional U.S. banks have been hesitant to engage with digital asset firms, citing the lack of regulatory clarity.

Coinbase’s Chief Policy Officer, Faryar Shirzad, expressed frustration on social media, claiming that U.S. bank regulators have “unilaterally and undemocratically” prohibited banks from offering crypto services. This marks the latest in a series of efforts by the crypto industry to press for more favorable regulations.

The crypto sector has been actively working to influence political outcomes, having donated millions of dollars to support Donald Trump’s bid for the White House, hoping to prioritize cryptocurrency regulation under a potential new administration. Shirzad also reached out directly to top U.S. banking regulators, including the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC), urging them to allow banks to engage with crypto businesses. However, the OCC declined to comment, and the Fed and FDIC did not immediately respond to inquiries.

The crypto industry has often accused U.S. regulators of deliberately hindering their access to the traditional financial system. While regulators have denied these accusations, the recent move by the U.S. Securities and Exchange Commission (SEC) to create a task force focused on developing a regulatory framework for crypto assets signals a potential shift in policy.

Former PayPal executive David Sacks has also been appointed as Trump’s “White House A.I. & Crypto Czar,” further suggesting that digital assets may receive more attention from the government if Trump is reelected. Despite these political shifts, U.S. banks have remained cautious about adopting cryptocurrencies in their services.

 

President Trump Signs Executive Orders on Crypto and AI Advancements

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President Trump Signs Executive Actions to Support Cryptocurrency and AI Industries

President Donald Trump has signed a series of executive actions aimed at strengthening two emerging sectors: cryptocurrency and Artificial Intelligence (AI). These initiatives signal the administration’s commitment to shaping the future of these innovative fields, positioning them for growth and development in the coming years.

Accompanying the president during the signing was David Sacks, a venture capitalist with significant influence in both the AI and crypto spaces. Sacks, who has also served as the White House’s point person on crypto and AI policy, played a key role in crafting the executive orders. His involvement reflects the administration’s recognition of the importance of industry leaders in guiding government policy on these technologies.

One of the key components of the executive order is the establishment of a working group focused on cryptocurrency. This group will include representatives from major federal agencies such as the Treasury Department, Justice Department, Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC). Their task will be to develop a comprehensive regulatory framework for digital assets. The group is expected to submit a report to the president within six months, offering recommendations for regulation and legislation, including the possibility of creating a national digital asset stockpile.

While the move was hailed by some in the crypto industry, reactions were mixed. Kara Calvert, Vice President for US Policy at Coinbase, the largest US cryptocurrency exchange, praised the president for taking decisive action and acknowledging the need for external expertise in shaping digital asset regulations. However, not all crypto advocates were satisfied. Some Bitcoin supporters expressed disappointment, particularly because the executive order did not prioritize Bitcoin as the centerpiece of a potential national reserve, an idea Trump had supported during his campaign. This omission left many wondering about the future direction of the government’s approach to cryptocurrencies.

Crypto Lobbying Risks Regulatory Capture, South African Central Bank Head Says at Davos

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During a panel at the World Economic Forum in Davos, South Africa’s central bank governor Lesetja Kganyago criticized the growing influence of the cryptocurrency industry on U.S. financial regulation. He warned that crypto lobbying risks “regulatory capture,” a situation where regulations are shaped to benefit powerful industry players at the expense of broader public interest.

Key Points:

  • Regulatory Capture Concerns: Kganyago expressed concerns that the push for government-held bitcoin reserves and other crypto-friendly regulations were being heavily influenced by the industry’s lobbyists, pointing out the dangers of letting money dictate regulatory decisions.
  • Criticism of Bitcoin as a Reserve Asset: He likened the idea of holding bitcoin as a reserve asset to holding assets like beef or apples, arguing that it lacked the historical and economic grounding of assets like gold.
  • Trump’s Crypto Policies: The panel also discussed the potential effects of President Trump’s crypto-friendly policies, including the creation of a U.S. government bitcoin stockpile. Proponents like Coinbase’s CEO, Brian Armstrong, argued that Trump’s presidency could be a major boon for the industry, pointing to the initial rise in bitcoin’s price after his election.
  • Lobbying Influence: The crypto sector has spent heavily on lobbying, with major firms like Coinbase and Ripple backing pro-crypto congressional candidates, which Kganyago believes could lead to skewed regulatory outcomes.
  • Need for Regulation: Jennifer Johnson, CEO of Franklin Templeton, noted that institutional investors were hesitant to enter the crypto market without clear regulatory guidance, which she described as crucial for enabling large-scale investment in the sector.