The Office of the Comptroller of the United States Currency (OCC), an independent office within the United States Treasury, issued a public letter today Clarifying that national banks and federal savings associations have the legal right to take custody of cryptocurrency assets.
Today’s announcement is not a change from a previous policy, but rather a response to a request for clarification from an unknown party. The OCC writes that banks have been able to take custody of digital assets since 1988, and that Bitcoin and other cryptocurrencies are simply a newer version of the same concept.
With the clarification, federally authorized US banks and savings associations can freely hold crypto assets for clients, whether they hold keys or provide other custodial and protection services.
A longer interpretive letter, written in response to the aforementioned request, it also leaves room for banks to continue developing technologically more advanced methods and services as the cryptocurrency industry continues to evolve and expand.
“From safe deposit boxes to virtual vaults, we must ensure that banks can meet the financial service needs of their customers today,” Acting Comptroller of the Currency Brian P. Brooks said in a statement. Brooks joined the agency from Coinbase in April, and sold $ 4.6 million in Coinbase shares before beginning his new government role.
“This view clarifies that banks can continue to meet the needs of their customers to safeguard their most valuable assets,” added Brooks, “which today for tens of millions of Americans includes cryptocurrencies.”
Why banks that provide crypto custody are important
Today’s announcement is seen as a significant boon to cryptocurrency in the United States, allowing banks and federal savings associations to further embrace the cryptocurrency and develop associated services without previously vague guidance.
“Arguably this is the biggest crypto news in the past two years,” said Christopher Robins, Head of Legal and Regulatory Affairs at Binance. Decipher in a sentence. “The OCC that states that national banks and federal savings associations can provide cryptocurrency custody services is a great step in promoting broader adoption of cryptocurrencies.”
“The interpretative letter illustrates the need and desire for the bank-grade custody services market,” added Robins. “Bitcoin and other digital currencies were created to bring transparency and efficiency to banking, and I am truly encouraged to see an important step like this by the OCC.”
The currency center of the cryptocurrency expert group, which had advocated the move for years, praised the announcement. in a blog post. According to the Coin Center, while the cryptocurrency allows users to manage their own money without the need for a centralized intermediary like a bank, some customers may still want the additional protection of a bank, particularly with larger amounts.
“Accepting that centralized entities for the safekeeping and storage of cryptocurrencies are inevitable and essential, so it is great news that, thanks to new OCC policies, there will be even more competition to provide those services,” wrote Peter Van Valkenburgh, Research Director of the Coin Center. . “National banks entering the game expand that competition and can also allow more traditional institutional investors to trade cryptocurrencies.”
“Despite having first written about this in 2016, I am still impressed by the pace of innovation at the OCC,” Van Valkenburgh added via Twitter. “Brian Brooks deserves enormous credit for moving the ball around by allowing cryptocurrency custody at national banks.”
