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Crypto custody services now legal for US banks

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TL;DR

America’s crypto industry has gotten a boost thanks to the approval for banks in the country to provide crypto custody services.

The Office of the Comptroller of the Currency (OCC) released a letter to the effect. Senior Deputy Comptroller and Senior Counsel Jonathan Gould wrote in the letter that national banks can provide crypto custody services by holding cryptographic keys for a crypto wallet.

Previously, only crypto exchange firms in America, like Coinbase, Gemini, Kraken, provide crypto custody services being licensed for such operations in the state. However, with this new development, other regulated financial firms that offer similar services for stock certificates could come in.

JP Morgan chase indirect crypto custody services

Before the approval for American banks to provide crypto custody services, JP Morgan Chase Bank has supported crypto exchange in America. Gemini, Coinbase are known clients of the JP Morgan in a time when American banks were nervous about providing banking services to the crypto industry.

American banks perceived crypto exchanges alongside other crypto startups as a reputational or compliance risk in the system. This is because crypto startups in America and the Security and Exchange Commission (SEC) always had compliance issues to settle.

The letter, however, affirms the position of the OCC that national banks may provide permissible banking services to any lawful business they choose, including cryptocurrency businesses.

Crypto community excited about the News

The crypto community on Twitter embraced the News with open arms, although a fraction of them believes storing cryptos with the banks is contrary to the culture of cryptocurrencies. However, many are happy because this would enable more retail participants in the market.

The legal crypto custody service approved for banks marks a new era for cryptocurrencies as it would facilitate the entrance of retail participants.

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Muhaimin Olowoporoku

Muhaimin loves writing on crypto news aside from being a crypto enthusiast. He has a knack for analysing issues and updating people on what's happening around the globe. He believes that blockchain and cryptocurrency are the most useful systems of mutual trust ever devised.

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