Is Coinbase On Its Way to Replace the Federal Reserve as America’s Financial Backbone?

Coinbase, one of the largest cryptocurrency exchanges, is calling on federal banking regulators to establish standardized rules for crypto-related services within the banking sector. The company has submitted an official request to the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC), urging them to update and modernize their existing policies to accommodate the growing intersection between traditional finance and cryptocurrencies.

Coinbase’s request highlights the need for regulatory clarity that would enable banks to offer cryptocurrency storage and execution (C&E) services, either directly or through third-party providers like Coinbase. The company argues that removing current regulatory barriers is essential for allowing legally compliant crypto businesses to collaborate with banks and provide secure, regulated services to customers.

The heart of Coinbase's proposal is to ensure that financial institutions—whether traditional banks or crypto-focused platforms—can safely store digital assets for consumers. This vision would integrate crypto into the broader financial system, making it accessible and secure through trusted financial institutions. Coinbase has made it clear that ensuring consumer confidence in digital asset storage is a top priority, aligning its goals with the broader trend of integrating crypto into mainstream finance. But the ambition behind Coinbase’s initiative goes beyond simple regulatory updates. Coinbase, leveraging its influence and proximity to powerful political circles, appears to be positioning itself as the future of financial infrastructure in the digital age. The company is not merely asking for permission to offer custodial services—it’s looking to become the de facto backbone of the new financial system.

In many ways, Coinbase's push for regulatory changes mirrors the trajectory of the Federal Reserve itself. Just as the Fed manages the U.S. dollar and oversees traditional financial institutions, Coinbase could become the central hub for digital currencies and crypto-related services. With the banking sector lacking the necessary infrastructure and expertise to service crypto accounts, banks may eventually turn to Coinbase as the go-to provider for crypto custodial services once regulatory frameworks are established.

This vision of a "crypto-Fed" is not entirely far-fetched. As the global financial system continues to evolve, the rise of digital currencies has sparked discussions about the need for a new infrastructure that can handle both fiat and digital assets. Coinbase is positioning itself as a key player in this transformation, suggesting that the traditional financial system will inevitably adapt to include cryptocurrencies as a core component.

In the current political climate, Coinbase's ambitions align with broader shifts in U.S. governance. With the Trump administration’s recent actions, including bold moves against the CIA and FBI, the traditional financial system is already under scrutiny. There is speculation that the Federal Reserve may also undergo significant changes, potentially creating a vacuum that companies like Coinbase could fill. If that happens, a new crypto-centric system may take shape, with Coinbase at its helm, utilizing technologies like XRP for a faster, more decentralized financial infrastructure.

As the landscape of finance continues to shift, Coinbase’s role may evolve from a simple crypto exchange to a central figure in the new financial order. If the company succeeds in gaining regulatory approval, it could become the new Federal Reserve System of the United States—one that combines the power of traditional finance with the emerging potential of digital currencies.