The Motley Fool on $COIN (Nov 9, 2026)

Welcome back to Mly Fool Hidden Gems Investing. Today we got some news from Coinbase. This is the largest cryptocurrency exchange, so where you can buy and sell cryptocurrencies, hold them.

It has been approved as a national trust company, and that is foreign language to me. So, we're going to get our interpreter in here. Matt, what is a national trust company, and why does Coinbase want to have one?

So the short answer is a national trust company gives them a federal license to hold crypto on behalf of institutions. Uh it's overseen by the by a federal authority instead of a state like they used to have a New York state license.

So it's not just a state level crypto license. Um it replaces the cryp the New York charter that they had in place since 2018. It's also important to realize what this isn't. Um, I mean, I know you used the word bank a couple times in the introduction.

This does not let Coinbase say take retail deposits. It doesn't allow them to make loans. It doesn't allow them to issue their own stable coins. That's a separate thing. Uh, it doesn't give them access to the Federal Reserve's payment systems.

So, there's a lot that traditional banks and can do that this doesn't give it, but it lets them be kind of a crypto custodian for institutions.

It's worth pointing out. Circle got theirs in July. Ripple got theirs in October. Block and Kraken have both applied for this. Uh so it's definitely more of a trend and this is like a one-time thing.

It's just that Coinbase is by I'm pretty sure bigger than the other four I just mentioned combined. Uh so so that's why this is such a significant thing.

Yeah, I think I think it's important as part of the growth story here. I mean, the the Coinbase National Trust Company, they got the special federal license from the OC, which is the federal agency that oversees the big US banks.

You know, previously, Coinbase had to get approved essentially state by state. That's a mess of different rules. And this new license essentially puts them on the same legal and regulatory playing field as some of the bigger custodian banks.

Like Matt noted, this is a trust license. It is not a traditional bank license. It is a very, you know, highly audited uh sort of custody service, if you will, for the big institutions.

Coinbase for example is agreeing to the strict rules of the legacy banking system albeit you know new guardrails that have been put in place by the Genius Act. So essentially we are seeing an integration.

The banking charter or the charter the the not the banking charter, what what Coinbase just got isn't going to move prices by itself. It makes Coinbase less dependent on a crypto boom because it gives them a new stream of revenue.

Uh, you know, it it can bring assets more assets into their platform, things like that. That's where they make their money.

I don't necessarily think we see crypto wake back up. I mean what we're talking about here with Coinbase and uh you know the actions taken by Circle, you know, Ripple as it as it pertains to having a national trust charter, this federal license.

I mean this is very much about kind of the background elements for these businesses putting those kind of integrations in place into the broader financial system and and within the regulatory space as well.

It doesn't drive you know retail hype or or trading volume.

So I think if [music] anything, if you look at this news, you want to see businesses like Coinbase being further [music] integrated into the existing financial system, but I don't think that you can take away broader implications for crypto as a whole.

if you look at this news, you want to see businesses like Coinbase being further integrated into the existing financial system