There’s big news today in the crypto world – the federal Office of the Comptroller of the Currency has come out with a letter indicating that there’s a way forward for commercial banks to begin to act as wallet holders for depositors.
A letter surfacing today maintains that banks will be able to hold cryptographic keys for a cryptocurrency wallet. Beyond that, OCC is suggesting that banks can broaden their custody services for crypto, in a world where digital assets are becoming more and more popular, and Bitcoin ATMs are becoming familiar to end users.
“National and state banks and thrifts have long provided safekeeping and custody services, including both physical objects and electronic assets,” write OCC spokespersons. “The OCC has specifically recognized the importance of digital assets and the authority for banks to provide safekeeping for such assets since 1998. In the letter published today, the OCC concludes that providing cryptocurrency custody services, including holding unique cryptographic keys associated with cryptocurrency, is a modern form of traditional bank activities related to custody services.”
Acting Comptroller of the Currency Brian P. Brooks has addressed the need for innovation in recent public remarks.
“From safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today,” Brooks said in a press statement announcing the change. “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.”
It’s not hard to see how this kind of ability could reshape the cryptocurrency sector and make it a much bigger part of our financial world. Look at how big banks influence lending, for example, and how they are able to move into different kinds of services aggressively. Then also think about how hungry these banks are for new service models, as regulatory efforts to curtail service fees starve their revenues. For legislators who want the U.S. to advance in the global race for blockchain dominance, this could be a win-win. It will, no doubt, be really handy for small investors who want to get into crypto without running their own wallet services.
Look for more as this type of service becomes real on the street, to see how these wallet holders will address taxes, and everything else.