U.S. Regulators Approve Federal Banks to Custody Kryptonian Currency

 

According to an announcement published July 22 and shared with Bitcoin Trader, the Office of the Comptroller of the Currency (OCC) is granting permission to banks authorized by the federal government to guard crypto-currencies.

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This issue aroused much scepticism, since cryptomoney wallets do not conform to the custody requirements of other types of property. However, in its letter interpreting the issue, the institution wrote:

„The OCC recognizes that, as financial markets become increasingly technological, there is likely to be a growing need for banks and other service providers to take advantage of new technology and innovative ways of delivering traditional services on behalf of customers.

In the words of the announcement, the new view „applies to national banks and federal savings associations of all sizes“.

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Acting Comptroller of the Currency, Brian Brooks, also considered the development as part of the modernization of banking in the U.S., saying that „From safe deposit boxes to virtual vaults, we must ensure that banks can meet the financial service needs of their customers today.

The OCC letter further specifies that bank „custody“ of cryptoactives depends on their access to the keys to cryptomoney wallets, rather than any physical requirements, confirming Andreas Antonopoulos‘ famous phrase „if they are not your keys, they are not your coins“.

The OCC specified:

„That national banks may hold the encryption keys used in connection with digital certificates because a key holding service is a functional equivalent to physical holding“.

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Coming from the Coinbase legal team, Brian Brook’s tenure as Acting Comptroller accelerated the incorporation of crypts into the U.S. financial system.

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Speaking to Cointelegraph in early June, Brooks hinted at his interest in expanding the right to crypto custody.

This is in response to an international trend by banks seeking to incorporate this kind of crypto asset.

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