By Hassan Mehmood (Saudi Arabia)
The regulator that supervises US national banks gives permission to banks to provide crypto custody solutions and the fiat bank accounts to crypto-based businesses via an interpretive letter.
The letter of the Office of the Comptroller of the Currency (OCC) will change the future of crypto assets in the United States because it is a regulation achievement for cryptocurrency. After this, the banks can provide fiat bank accounts to crypto-related businesses, and moreover, they are now even able to offer crypto custody services to customers.
Custody of Customers’ Private Keys
According to OCC, digital currencies have no physical existence so banks will hold the private keys of customers in a safe place. Acting Comptroller of the Currency Brian P. Brooks said “From safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today.”
“This opinion clarifies that banks can continue satisfying their customers’ needs for safeguarding their most valuable assets, which today for tens of millions of Americans includes cryptocurrency,” he added.
Before this, crypto users used to keep digital assets in a wallet offered by an exchange or other custodial company. But now this function will perform by traditional banks as well.
Good News for Crypto Firms
Renowned cryptocurrency firms have welcomed the decision taken by the US regulator.
“The OCC letter is a positive development for the entire crypto industry. A lack of regulatory clarity has been a big roadblock to more institutional activity in crypto, and major pronouncements like this help move the needle,” Nathan McCauley, CEO of crypto assets custodian Anchorage, said. “Digital asset custody presents more than regulatory challenges. It is highly technical, often bespoke work with no easy corollary in traditional finance.”
Noah Perlman, the Chief Compliance Officer at Gemini, said:
“Today’s forward thinking announcement by the OCC validates Gemini’s long standing approach to custody. Gemini has built an institutional-grade custody solution to address the unique challenges of storing digital assets, that’s regulated by the NYDFS, and serves many institutional partners. A regulated solution provides the best option for the safety and security of clients’ crypto assets.”
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