US OCC States That Banks May Provide Cryptocurrency Safekeeping

Federal savings associations and national banks within the US can now officially provide cryptocurrency custody services to its respective customers. This comes after a guidance letter from a federal banking regulator clarified the role that traditional financial institutions have when it comes to the virtual asset market.

Publishing Clarifying Letter On Wednesday

The Office of the Comptroller of Currency (OCC) issued out an interpretive letter this week. Within this letter, the regulator stated that federal savings associations, as well as national banks, are fully authorized to provide crypto-related services for their clients. This includes that of holding a unique encoded key associated with digital currencies for their respective clients.

The letter itself was made public on Wednesday, and came as a response to an unidentified party’s request. This unknown party asked the Treasury Department unit, the one that supervises and regulates savings associations and banks, to address a national bank’s authority when it comes to crypto custody services. Until now, banks have primarily faced ambiguity when it comes to compliance in the cryptocurrency field, should they wish to provide services in the space.

Banks Authorized To Serve Crypto Businesses

In response, the OCC reaffirmed its position, stating that banks are allowed to provide permitted banking services to cryptocurrency businesses. However, this is as long as the banks comply with regulations, such as anti-money laundering (AML) requirements, as well as manage the risks effectively.

Savings associations, as well as banks, have long since provided custody and safekeeping services for physical as well as digital assets. Through this, the OCC stated that cryptocurrency services are then presented with a modern form of traditional bank activities, related to custody services.

A New Dawn Of Customer Needs

Brian Brooks stands as the acting Comptroller of the Currency, and gave a public statement about the matter. He explained that the OCC must ensure banks are capable of meeting the financial needs of their customers in this day and age, be it virtual vaults or safe-deposit boxes. With this opinion, Brooks stated that there is clarification, one that allows banks to continue satisfying the needs of their customers. In this case, Brooks said that this mandates the safeguarding of the most valuable assets of their customer, something that millions of Americans consider cryptocurrency in this day and age.

The OCC went further in this letter, recognizing the future growth in need for banks and other financial service providers to use these new technologies. This will occur due to their customers’ needs changing as financial markets become more and more digitized.