Cryptocurrency

OSS USA allows banks to provide cryptocurrency storage services

The Office of the Comptroller of the Currency (OCC) has authorized national banks to provide custodian services for cryptoassets.

In an open letter, Senior Deputy Controller and Senior Advisor Jonathan Gould stated that any national bank will be able to store unique cryptographic keys for cryptocurrency wallets. This will allow banks to store their customers’ digital assets.

Previously, only specialized firms could provide custody services, which usually required a state license to provide services to large investors. Now large regulated financial companies that already provide similar services, such as holding share certificates, will be able to enter the market.

The letter notes that banks “can offer more secure storage services than existing services.” Both consumers and investment advisors may want to use regulated custodians to ensure that private keys are safe and therefore access to their funds. The letter says:

“The provision of cryptocurrency storage services will be somewhat different from other depository operations. The OCC recognizes that as financial markets become more technologically advanced, banks and other service providers are likely to have an increasing demand for new technologies and innovative ways to deliver traditional services on behalf of customers. ”

The document states that banks will be able to provide both fiduciary and non-fiduciary custody services. The regulator also notes that banks “should develop and implement these activities in accordance with sound risk management practices and align them with the bank’s overall business plans and strategies.”

The letter confirms the OCC’s position that “national banks can provide banking services to any legitimate business, including cryptocurrency companies, provided that they effectively manage risk and comply with applicable law.” 

Perhaps this will pave the way for new relationships between cryptocurrency companies and banks, which often refuse to service representatives of the industry. However, a positive trend has been observed recently. For example, in May, banking giant JPMorgan began providing services to cryptocurrency exchanges.

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