The U.S. OCC has given the green light to banks to provide cryptocurrency custody services.
The news came yesterday through a letter sent by the US banking supervisory authority. This gave the green light for the banks to finally manage this sector.
OCC, the Office of the Comptroller of the Currency, is an independent office of the US Treasury Department. So this pronunciation takes on governmental significance. So much so that it can already be considered effective, the banks can already apply it.
In the announcement, as well as in the letter, it is explained that banks can offer this service, which also includes the custody of keys associated with cryptocurrency. It is also added that banks can provide any type of service related to cryptocurrency, as long as they comply with current laws.
As the OCC explains, this change is due to the need to use secure places like banks, and specifically for three reasons:
- The cryptocurrencies wallet keys are irreplicable if lost, so whoever loses the keys loses the value of the crypto possessed;
- Banks can offer better security services than existing ones;
- Investment advisors prefer to entrust their clients’ keys to banks.
To this is added that:
“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. By providing such services, banks can continue to fulfill the financial intermediation function they have historically played in providing payment, loan and deposit services. Through intermediated exchanges of payments, banks facilitate the flow of funds within our economy and serve important financial risk management and other financial needs of bank customers”.
Brian P. Brooks, Acting Comptroller of the Currency, head of OCC, explained:
“From safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today,” said Acting Comptroller of the Currency Brian P. Brooks. “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.”
Banks and cryptocurrency, hate and love
The breakthrough of the OCC has been welcomed by the crypto sector.
Brian Armstrong, CEO of Coinbase, tweeted one word very briefly: “Progress”.
Brad Garlinghouse, CEO of Ripple, commented instead:
“BOOM! Today’s ruling is a huge step forward. The OCC is absolutely leading the way to foster innovation, protect consumers and provide a level playing field for all. The future has never been fiat versus crypto – these can and should coexist in harmony!”
In fact, cryptocurrencies and Bitcoin are born to be decentralized. In short, they are something else compared to banks. From this point of view, the pronunciation of the OCC and the choice of a user to entrust their crypto to a bank seems to be a contradiction.
However, for banks such a turning point seemed inevitable: cryptocurrencies in fact are becoming an increasingly used tool, even in finance, so it is essential that traditional institutions, starting from banks, can keep up with the times and start offering services related to them. The risk is that of being cut off from the future.