Cryptocurrency exchange Coinbase Global (NASDAQ: $COIN) has received conditional approval for a national trust company charter from the Office of the Comptroller of the Currency.

The charter moves Coinbase a step closer to becoming a federally regulated cryptocurrency custodian.

Coinbase Global must now build out compliance systems, hire key staff, pass regulatory reviews, and demonstrate strong risk management and anti-money-laundering controls before it can secure a full charter in the U.S.

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Eventually securing a full charter would let Coinbase Global operate a non-insured national trust company focused on digital asset custody, supporting its push to generate revenue from institutional clients and diversify beyond trading fees.

Several other crypto firms have also applied for trust charters, including BitGo (NYSE: $BTGO) and Circle Internet Group (NYSE: $CRCL). 

Coinbase stresses that it isn't looking to become a commercial bank but says that the charter will help it to “streamline oversight for new offerings and enable continued innovation to integrate digital assets into traditional finance.”

For institutions, custody is less about trading and more about trust. A pension fund may want exposure to Bitcoin (CRYPTO: $BTC) but needs a regulated entity to hold the asset securely.

COIN stock has declined 27% this year to trade at $171.95 U.S. per share.