Crypto Exchanges Talking To Regulators About Banking Licenses – Report

Bitcoin, Blockchain and the Law, Investing, News, Regulation | May 21, 2018 By:

 At least two cryptocurrency exchanges have held discussions with US regulators about obtaining federal banking licenses, according to a report in the Wall Street Journal. If successful in obtaining the licenses, the exchanges would be able to expand their services and potentially create new pathways in the market.

Coinbase, operator of the largest US cryptocurrency exchange by trading volume, approached the US Office of the Comptroller of the Currency earlier this year. Ivy Koin LLC, a payments platform for fiat and crypto, has more recently talked with the Federal Deposit Insurance Corp.

While obtaining a federal banking license would allow the firms to offer bank accounts and other services without having to partner with an established bank, it would also significantly increase regulations that they would need to heed. The advantage would come from dealing with one federal solution rather than having to navigate a state-by-state web of laws and regulatory bodies.

 Coinbase declined to comment, but Ivy Koin confirmed its discussions.

 An FDIC spokeswoman told the WSJ that “We encourage parties to have informational conversations on the application process.” The FDIC grants deposit insurance to new banks.”  She declined to discuss the meetings.