OCC Permits National Banks In US To Crypto Custody

Jyoti  |  Jul 23, 2020

All the nationally chartered bank in the US can now offer custody services to the cryptocurrencies, announced the Officer of the Comptroller of the Currency (OCC) on July 22.

The Senior Deputy Comptroller and Senior Counsel Jonathan Gould, in the public letter, mentioned that the national banks in the country have been allowed to obtain the unique cryptographic keys for the crypto wallet so that they could provide custody services to their clients’ digital asset.

Banks To Provide Secured Storage To Clients

Earlier, only the specialist firms like Coinbase were allowed to offer custody but that too when they have a state license like ‘trust charter’.

Now, the regulated financial companies, who already offer the custody services to the stock certificates, will be offering similar services to the cryptocurrencies.

The letter issued by the OCC has notified that the national banks could now offer more secured storage services to their clients. It further mentioned that if the consumers and the investment advisors do not want to lose their private keys then they could use the regulated custodians.

According to the OCC letter, offering custody services for cryptocurrencies will be very different in various aspect, when compared to other crypto activities.

The letter further mentioned,

“The OCC recognizes that, as the financial markets become increasingly technological, there will likely be increasing need for banks and other service providers to leverage new technology and innovative ways to provide traditional services on behalf of customers”.

Fiduciary And Non-Ficudciary Custodian Services

The OCC in its letter has clearly stated that the national banks have been allowed to provide both fiduciary and non-fiduciary custodian services to their clients.

Additionally, it stated that those banks who are planning to be a part of the crypto space should create and implement activities which could manage the risk practices and then regulate them with the business plan and strategy of the bank itself.

Presently, Brian Brooks, who earlier was the executive at Coinbase, is leading the OCC. Since the day he has joined OCC, Brooks suggested a number of reforms which could benefit the crypto companies.

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