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1. What the CFTC decided on November 5
The Commodity Futures Trading Commission (CFTC) on November 5 cleared derivatives clearinghouses to use trust companies, and not only banks, for daily settlements with their clearing members. The staff relief gives custodians that hold crypto trust charters, Coinbase among them, a possible route into a core piece of US market infrastructure, although the permission can be withdrawn at any time.
The decision came from the agency's Division of Clearing and Risk, which issued a no-action letter in response to a request filed on October 29 by Nodal Clear, a derivatives clearinghouse. Under the letter, a clearinghouse may rely on a trust company for settlement so long as that trust company satisfies the same requirements that apply to a settlement bank. In practical terms, staff have said they will not recommend enforcement action against a clearinghouse that makes this choice and meets the stated conditions.
Until now, the settlement role had been reserved for banks. The change therefore matters less for what it does on day one than for the category of institution it admits. Trust companies are the legal form many digital asset custodians have chosen, and several of the largest crypto firms have spent the past year obtaining federal or state trust charters. The letter gives those entities a reason to compete for business that sits at the center of regulated futures and options trading.
2. How does daily derivatives settlement work?
Daily settlement is the process by which a clearinghouse collects money from clearing firms whose positions lost value and pays it to firms whose positions gained, and settlement banks are the institutions that move that cash. It happens every business day, because cleared derivatives are marked to market rather than left to accumulate gains and losses until a contract expires.
A clearinghouse stands between the two sides of every cleared trade. To keep that arrangement safe, it recalculates the value of each member's positions and requires losses to be paid promptly. The institutions that hold the relevant accounts and execute these transfers are a small but essential part of the system: if money does not arrive on time, the clearinghouse's protections for the rest of the market are weakened.
The amounts in motion are very large, and it is important to be precise about what they represent. The transfers are funds passing between clearing firms to settle their gains and losses. They are not fees earned by the institutions that process them. Even so, the volume of money that moves through the settlement layer each day illustrates why trust companies, and the crypto firms that own them, see an opportunity in being allowed to handle part of it.
3. The legal mismatch the letter addresses
Two sets of rules had been pointing in different directions. Federal commodities law permits customer funds to be held at banks or at trust companies. CFTC Regulation 39.14, which governs settlement procedures at clearinghouses, defines a settlement bank more narrowly, as a bank and nothing else. A trust company could therefore be an acceptable home for customer money under the statute and still be shut out of the settlement function under the regulation.
Nodal Clear's request asked staff to resolve that tension, and the no-action letter does so without touching the text of the rule. Regulation 39.14 still says what it said before. What has changed is the enforcement posture of the division responsible for overseeing clearinghouses, which has committed not to pursue firms that treat a qualifying trust company the way they would treat a settlement bank.
Nodal Clear has a direct interest in the outcome. The clearinghouse partnered with Coinbase in 2025 to bring the stablecoin USD Coin (USDC) into US futures trading, and Coinbase Custody Trust was already expected to provide daily settlement services under that arrangement. The staff letter removes a regulatory obstacle to that plan while extending the same option to other clearinghouses that meet the conditions.
4. Crypto trust charters put custodians in position
Several developments in the same week show how quickly digital asset firms are building the corporate structures needed to take on this kind of work. Coinbase's national trust bank charter took effect on November 6, one day after the CFTC letter. The new entity, Coinbase National Trust Company, is separate from Coinbase Custody Trust and is able to offer digital asset custody under federal supervision.
BitGo moved in a related direction on November 4, when it launched a Global Markets division. The unit brings together derivatives trading, financing, collateral management and settlement, a combination that mirrors the services large financial institutions offer to professional trading clients.
They are not alone. Circle, Ripple, Crypto.com and Bridge, which is owned by the payments company Stripe, have each received national trust bank approvals from the Office of the Comptroller of the Currency (OCC) in recent months. The OCC is the federal agency that charters and supervises national banks, and a national trust charter allows a company to operate under a single federal supervisor rather than a patchwork of state regimes.
Taken together, these steps mean a growing list of crypto-native companies now have, or are close to having, regulated trust entities that could meet the conditions the CFTC has set. Whether clearinghouses choose to use them is a commercial question. The letter makes that choice available; it does not direct any business toward trust companies.
5. Community banks push back on trust charters
Opposition from the traditional banking sector has been building alongside the charter approvals. In October, the Independent Community Bankers of America (ICBA), a trade group for smaller US lenders, sued the OCC. Its argument is that the agency's trust charter rules allow crypto firms to carry out banklike activities without having to satisfy the full set of requirements that apply to banks.
The lawsuit is one front in a broader disagreement about how to regulate specialized institutions that enter lines of business historically provided by banks. A trust company typically has a narrower set of powers than a full-service bank, and its regulatory obligations are shaped accordingly. Banking groups contend that the gap in obligations becomes a competitive advantage once those firms start offering services that look like banking. Supporters of the charters respond that the rules are matched to the risks the institutions actually take.
The CFTC's settlement relief lands in the middle of that dispute. It does not depend on the OCC's charter rules, and it applies to trust companies generally rather than to crypto firms specifically. But the firms best placed to use it include the same companies whose charters the banking lobby is challenging, which ties the two debates together.
6. An industry group says the balance has not shifted
Cody Carbone, chief executive of The Digital Chamber, a digital asset trade association, rejected the idea that the letter tilts the field. In his view, the relief neither helps nor hurts trust companies relative to banks. Both kinds of institution already compete within the limits of their respective charters, he said, and the CFTC's decision simply gives clearinghouses more options without taking any business away from banks.
Carbone also addressed the central complaint raised by banking groups. "A trust company charter is not a regulatory shortcut," he said. The remark reflects the industry's position that trust entities are supervised institutions with their own capital, custody and compliance obligations, and that the condition in the CFTC letter, which holds trust companies to the standards applied to settlement banks, reinforces that point.
7. Why the relief could be reversed
The form the CFTC chose limits how much certainty trust companies can draw from it. A no-action letter is a statement of staff intent. It leaves the underlying regulation unchanged, and the staff who issued it, or their successors, can withdraw it. A formal amendment to the rule would be more durable, but it would normally require the agency to publish a proposal and take public comment before adopting it.
Jordan Yeagley, a shareholder at the law firm Buchanan Ingersoll & Rooney, warned that a change in the agency's leadership could lead to the letter being pulled. Amending the regulation itself, Yeagley said, would remove that risk. For a custodian deciding whether to invest in settlement systems, staff and client relationships, the difference is significant: a business built on a staff letter rests on a position that a future administration is free to abandon.
The agency's current makeup adds to the uncertainty. CFTC Chair Michael Selig is the commission's only sitting member, even though the law provides for five commissioners. Selig has led the agency since December 2025, and the four remaining seats are vacant. Policy at the CFTC is therefore closely identified with a single official, and the direction of the agency could change substantially as seats are filled or leadership turns over.
8. What comes next in Washington
The political backdrop shifted two days before the letter was issued. Democrats won control of both chambers of Congress in the midterm elections on November 3, and the new Congress convenes in January. From that point, lawmakers who have been more skeptical of the digital asset industry will have greater power to examine the CFTC's agenda.
That power runs through two channels. The Senate confirms nominees to the commission, which gives the incoming majority influence over who fills the four empty seats. The House and Senate Agriculture Committees oversee the agency, which means they can call hearings, request documents and press officials on decisions such as the settlement relief.
One figure to watch is Senator-elect Sherrod Brown, who won Ohio's Senate race on November 3 despite heavy opposition spending by political action committees backed by the crypto industry. Brown could take a prominent role on the Senate Agriculture Committee, placing a long-standing critic of the sector close to the body that supervises the CFTC.
For crypto custodians, the near-term picture is one of opportunity with conditions attached. The regulatory barrier that kept trust companies out of daily derivatives settlement has been lifted for now, the firms that could benefit are securing charters at a steady pace, and at least one clearinghouse has a partner ready. What remains unsettled is whether the opening survives the ICBA's court challenge to the charters themselves, closer scrutiny from a Democratic Congress, and the possibility that a staff letter is withdrawn before the rule behind it is ever rewritten.