In a major development for mainstream crypto adoption, regulatory approval and general usage of cryptocurrencies, the Office of the Comptroller of the Currency (OCC) – an independent bureau of US Department of Treasury of United States of America has signaled its approval for national banks and federal savings associations to start providing cryptocurrency management and custody services to their users on July 22. The OCC in a letter recognized the importance of cryptocurrencies, referring them as “digital assets” and instructed national banks and federal savings associations to extend services, beyond physical and electronic assets. A number of other US states have already authorized the banks and financials institutions under their jurisdiction, to provide such services.
“From safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today. 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.” – Acting Comptroller of the Currency Brian P. Brooks. ”
The Office of the Comptroller of Currency (OCC) also recognized that holding custody of cryptographic keys/private keys of cryptocurrency or digital assets is a modern form of bank activity. The letter also contains an approval that banks and financial institutions can provide more services beyond holding crypto-assets, in a manner of interpretation seemingly left upto them. In doing so, the OCC has recognized the changing landscape of financial digitization, the importance of crypto-assets and the need for banks/financial institutions to utilize the new technology, to better serve their customers.
Impact Of The OCC Green Signal
The federal nod alluding to the existence and importance of crypto-assets, will bring legitimacy and credibility to this new asset class, in the public’s eye. The approval allowing banks/other financial institutions will encourage people to discover/buy these assets and not worry about their security, since the banks would provide custody and management services, much like they do for traditional assets. It will enhance adoption and general usage of crypto-assets, in the long term, since the retailers/sellers and merchants will be more open to the idea of accepting crypto, as a means of payment for goods and services. Also, it will remove the taboo and regulatory uncertainty regarding this asset class, which held back people from buying/holding it, in the past.
The Office of the Comptroller of the Currency (OCC) is an independent arm of the Department of Treasury (United States of America). It charters, regulates, and supervises all national banks and federal savings associations as well as federal branches and agencies of foreign banks.