Earlier this week, a letter from the United States OCC confirmed that banks can store cryptocurrencies for their clients.
On July 22nd, an independent bureau of the United States Treasury, known as Office of the Comptroller of the Currency (OCC), issued a public letter clarifying that national banks and federal savings associations are legally permitted to have custody of cryptocurrency assets.
In other words, US banks have the right to provide storage services for Cryptocurrencies.
Fortune reported that the OCC letter, which was addressed to an unnamed US financial institution, “also opens the door for banks to offer more exotic services”, including staking and cryptocurrency lending.
Providing cryptocurrency services is a “modern form of these traditional bank activities.”
Regarding custody, the letter said that “national banks have long provided safekeeping and custody services for a wide variety of customer assets, including both physical objects and electronic assets.”
“[...] The OCC concludes...that providing cryptocurrency custody services, including holding the unique cryptographic keys associated with cryptocurrency, is a modern form of these traditional bank activities.”
The letter also notes that banks could potentially provide services that amount to “more secure storage services compared to existing options,” and that consumers and investment advisors may have a desired to entrust regulated custodians with their assets, rather than an unregulated entity.
The letter was authored by Brian Brooks, a former Coinbase executive who is the current head of the OCC. CoinDesk reported that since Brooks joined the regulatory earlier this summer, he “has already proposed a number of reforms that would benefit crypto companies.”
Letter does not represent policy change, but rather clarification of existing policy
While the announcement does not represent a policy change--rather, a clarification of an existing policy-- the news could be quite significant for the cryptocurrency industry.
Previously, a lack of legal clarity around whether or not banks in the United States had the right to hold cryptocurrencies for their customers led banks to avoid Bitcoin and other cryptocurrencies. Fortune reported that this resulted in a de facto ban on banks providing many crypto-related services to their customers.
Now, however, big banks have essentially been given the ‘go-ahead’ to begin offering cryptocurrency custody and other crypto-related services to their users. The question is: will they?
“I'm looking forward to getting my ass kissed by all the banks now.”
For Barry Silbert, the founder and chief executive of crypto industry investment firm Digital Currency Group, the answer is likely ‘yes.’
“I'm looking forward to getting my ass kissed by all the banks now,” he wrote on Twitter following the letter’s publication.
“Oh what a change from when we first met??!!,” wrote Caitlin Long, founder and chief executive of crypto-friendly bank Avanti Bank and Trust, in reply. “That was 2014, I think...my how the tables have turned.”
After all, the cryptocurrency industry’s market cap currently sits at roughly $285 billion--a nice chunk of change that US banks could potentially be interested in dipping their fingers into.
Some major banks in the United States have already started to provide cryptocurrency-related services to their clientele: JPMorgan Chase, for example, began providing support to Gemini and Coinbase earlier this year.
Still, however, banks in the U.S. maintained a cautionary approach toward serving the crypto industry; cryptocurrency exchanges and other startups seem to be generally regarded as risky for banks’ reputations, as well as a legal headache.
The distinction that banks can offer custody services, however, may be a step toward alleviating some of the banks' concerns.
What are your thoughts on whether more banks will begin to offer crypto custody services? Tell us in the comments below.
On July 22nd, an independent bureau of the United States Treasury, known as Office of the Comptroller of the Currency (OCC), issued a public letter clarifying that national banks and federal savings associations are legally permitted to have custody of cryptocurrency assets.
In other words, US banks have the right to provide storage services for Cryptocurrencies.
Fortune reported that the OCC letter, which was addressed to an unnamed US financial institution, “also opens the door for banks to offer more exotic services”, including staking and cryptocurrency lending.
Providing cryptocurrency services is a “modern form of these traditional bank activities.”
Regarding custody, the letter said that “national banks have long provided safekeeping and custody services for a wide variety of customer assets, including both physical objects and electronic assets.”
“[...] The OCC concludes...that providing cryptocurrency custody services, including holding the unique cryptographic keys associated with cryptocurrency, is a modern form of these traditional bank activities.”
The letter also notes that banks could potentially provide services that amount to “more secure storage services compared to existing options,” and that consumers and investment advisors may have a desired to entrust regulated custodians with their assets, rather than an unregulated entity.
The letter was authored by Brian Brooks, a former Coinbase executive who is the current head of the OCC. CoinDesk reported that since Brooks joined the regulatory earlier this summer, he “has already proposed a number of reforms that would benefit crypto companies.”
Letter does not represent policy change, but rather clarification of existing policy
While the announcement does not represent a policy change--rather, a clarification of an existing policy-- the news could be quite significant for the cryptocurrency industry.
Previously, a lack of legal clarity around whether or not banks in the United States had the right to hold cryptocurrencies for their customers led banks to avoid Bitcoin and other cryptocurrencies. Fortune reported that this resulted in a de facto ban on banks providing many crypto-related services to their customers.
Now, however, big banks have essentially been given the ‘go-ahead’ to begin offering cryptocurrency custody and other crypto-related services to their users. The question is: will they?
“I'm looking forward to getting my ass kissed by all the banks now.”
For Barry Silbert, the founder and chief executive of crypto industry investment firm Digital Currency Group, the answer is likely ‘yes.’
“I'm looking forward to getting my ass kissed by all the banks now,” he wrote on Twitter following the letter’s publication.
“Oh what a change from when we first met??!!,” wrote Caitlin Long, founder and chief executive of crypto-friendly bank Avanti Bank and Trust, in reply. “That was 2014, I think...my how the tables have turned.”
After all, the cryptocurrency industry’s market cap currently sits at roughly $285 billion--a nice chunk of change that US banks could potentially be interested in dipping their fingers into.
Some major banks in the United States have already started to provide cryptocurrency-related services to their clientele: JPMorgan Chase, for example, began providing support to Gemini and Coinbase earlier this year.
Still, however, banks in the U.S. maintained a cautionary approach toward serving the crypto industry; cryptocurrency exchanges and other startups seem to be generally regarded as risky for banks’ reputations, as well as a legal headache.
The distinction that banks can offer custody services, however, may be a step toward alleviating some of the banks' concerns.
What are your thoughts on whether more banks will begin to offer crypto custody services? Tell us in the comments below.
Rachel is a self-taught crypto geek and a passionate writer. She believes in the power that the written word has to educate, connect and empower individuals to make positive and powerful financial choices. She is the Podcast Host and a Cryptocurrency Editor at Finance Magnates.
Bitget's Bitcoin Reserve Ratio Soars Over 300% Following Halving
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
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#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
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20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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