Coinbase Applying for a Banking License?

Coinbase is undeniably one of the biggest crypto platforms today. When the cryptocurrency market skyrocketed in 2017, it reported having generated $1 billion in revenue during that year. Coinbase was able to take $150 billion in assets traded by more than 20 million users. In fact, the San Francisco-based company was able to land in number 10 on the 2018 CNBC Disruptor 50 List.

According to Coinbase President and COO Asiff Hirji, “We don’t see ourselves as a crypto exchange”. He also mentioned that “We are very focused on the establishment of the crypto economy. We see ourselves as enabler of that future economy”.

Moving Towards Growth

Coinbase has been looking for top executives from LinkedIn, Twitter, Facebook, and even New York Stock Exchange. Also, they have invested in their manpower doubling their full-time engineers that overhaul the platform’s code. And in doing so, they were able to increase the capacity of Coinbase by 1,000 percent. And it looks like Coinbase isn’t even stopping. It is expected to double again in the coming months according to the letter that they released in early May in response to the pressure given by the New York Attorney General’s office.

Coinbase was also able to acquire Earn.com in April for $100 million. Using Earn.com, it lets users to send and receive digital currencies for replying to mass-market emails as well as in completion of micro tasks. In addition to buying Earn.com, they are also taking in Earn’s founder and CEO. Earn.com’s CEO will work as Coinbase’s first-ever chief technology officer.

These days, it looks like Coinbase is bullish than ever. It is now valued around $8 billion when it bought Earn.com according to Recode. It is a much higher figure compared to the valuation of venture capitalist financing in summer of 2017 at $1.6 billion.

According to Hirji, he mentioned that “What we provide is an on-ramp from the old economy to the new from fiat to crypto”. He also added that “we need a bridge to get there, and we are providing that bridge”.

Bank License

It has been reported that Coinbase is now planning to obtain a bank license. Officials of the crypto exchange platform met with the US Office of the Comptroller of the Currency during a few months back. They commented on the subject saying that “Coinbase is committed to working closely with state and federal regulators to ensure we are properly licensed for the products and services we offer”.

Coinbase is now thinking ahead considering the additional scrutiny given to cryptocurrency-related companies. Japan is now raising the bar when it comes to operating a crypto exchange in the country. That is after the Coincheck hack.

If Coinbase is able to get a banking license, this could lessen the hassle for the company. Unlike dealing with separate state laws, they can instead follow just one federal provision. There is a possibility that the banking license is a must in order to have regulatory clarity in the niche and to ensure that the business is going to straightforward without any legal problem. Joseph Otting who is the head of the OCC mentioned in April that “most fintechs come to us because they have heard of this thing called a national banking charter that gives tehm pre-emption across state lines. When they come and they speak to us, and they understand what it really takes to be a bank, they kind of glaze over and often leave skid marks leaving the building”.