US Regulator Greenlights Banks to Provide Custody Services for Crypto

The Office of the Comptroller of the Currency (OCC), which is an independent bureau within the United States Department of the Treasury, has officially allowed federally chartered banks to store cryptocurrency wallet keys.

Federally Chartered Banks and Thrifts May Provide Custody Services For Crypto Assets https://t.co/lZS1xj3ZMK

— OCC (@USOCC) July 22, 2020

The open letter written by the OCC Deputy Head Jonathan Gould suggests that banks are capable of offering safer custody services than existing market players. Banks are now allowed to provide fiduciary and non-fiduciary custody services. Apart from banks, the decision also covers federal thrifts.

Notably, the letter also suggests that custodial services may “extend beyond passively holding ‘keys’.”

Brian Brooks, former Coinbase executive and current head of the OCC, added that “from safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today.” He believes that dozens of millions of Americans see cryptocurrencies as valuable assets.

The decision seems to garner high appreciation from the crypto-industry.

US banks being able to offer custody is insanely bullish bc it means the guys like signature/silvergate could onboard fiat deposits -> convert to stablecoin ->get yield in DeFi

Incumbents will see this growth and then join

It gives a biz model for crypto custodians finally

— Su Zhu (@zhusu) July 22, 2020

I'm looking forward to getting my ass kissed by all the banks now

— Barry Silbert (@barrysilbert) July 22, 2020

I have never been more bullish on crypto than today.

— Preston Byrne (@prestonjbyrne) July 22, 2020

Prediction: JPMorgan Chase will acquire Coinbase.

— Pierre Rochard (@pierre_rochard) July 22, 2020

Currently, Coinbase Custody is the biggest institutional crypto custodian in the U.S. It manages $7 billion worth of digital assets. Other major custodians in the U.S. are Fidelity Digital Assets, BitGo, and Bakkt.

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