The United States Office of the Comptroller of the Currency (OCC) announced a public letter on July 22nd, defining that federal savings association and national banks have the lawful right to take administration of crypto-assets.
The OCC is an independent agency within the US Department of The Treasury and was organized to oversee, direct, and charter all federal saving associations and national banks in the US.
Cryptocurrency Joins Institutional Banking
The OCC has published a position statement for the cryptocurrency industry by confirming that all federal saving associations and national banks are allowed to offer cryptocurrency custody services for customers. With the letter, federal savings associations and national banks have been made aware that they can unobstructedly maintain cryptocurrency assets for clients, whether it is holding keys or granting other custody or protective assistance.
The letter defines the stance by the OCC that bank administration services, which have been known to include securing cryptocurrency, can stretch to cryptographic codes and other cryptocurrency-related assets.
Chief Counsel and Senior Deputy Comptroller at the Office of The Comptroller of The Currency (OCC) signed the letter as an acknowledgment to an unnamed bank, which had inquired the evaluation. The letter reaffirms the status of the OCC that national banks can allow legal banking services to any lawful business they choose, including cryptocurrency businesses, given that they comply with applicable law and expertly manage the risks.
In the letter, the regulator described the rationale for its arrangement, saying that cryptocurrency users solicit secure administration for their crypto assets from distinguished institutions such as banks. The OCC also confirmed that banks granting custody storage could be an essential advantage for market participants such as investment advisers and fund managers who need third-party asset custodianship.
As part of the letter, the OCC said that state and national banks and federal savings associations have long implemented administration and safekeeping services, including both electronic assets and tangible objects. The regulator stated that the OCC has mainly acknowledged the importance of digital assets and the position that banks perform in rendering protection for such holdings since 1998.
The Acting Comptroller of The Currency at the OCC, Brian Brooks, also declared that regulators strive to guarantee that banks allow financial services that satisfy the prevailing requirements of their clients. He stated that banks could maintain providing cutting-edge custody assistance similar to safe security boxes and vault storage to securely protect customers’ valuable assets, including cryptocurrencies.
Brooks is the previous chief legal officer of Coinbase cryptocurrency exchange, who held office at the OCC less than a couple of months back. The OCC said that its endorsement does not restrict banks to a particular kind of cryptocurrency custody. Financial institutions can, consequently, hold digital assets and deposit copies of their clients’ private keys in secure cold storage buildings.
Growing Cryptocurrency Custody Matters
The latest release is regarded as a vital boon for cryptocurrency in the US. The progress has provided federal savings agreements and national banks to adopt cryptocurrency further and improve relevant services without previously-vague administration.
The statement would thus allow a growing number of banks and financial institutions to launch crypto custodial services. These answers give institutional and retail investors peace of mind that their digital assets are underwritten, protected, and under the care of a consigned third-party, thus relieving them from accountability for safeguarding their crypto assets.