The Office of the Comptroller of the Currency (OCC) has posted a letter clarifying national banks’ and federal savings associations’ authority to provide cryptocurrency custody services for customers. The OCC is the lead bank regulator in the US.
Recently, the OCC has issued several forwarding thinking statements regarding Fintech innovation and the banking sector. The comments regarding cryptocurrency address a pointed aspect pertaining to digital assets and the broader utilization in markets.
According to the OCC, national and state banks and thrifts have long provided safekeeping and custody services. The OCC says it has specifically recognized the importance of digital assets and the authority for banks to provide safekeeping for such assets since 1998.
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.” Additionally, crypto custody services may extend beyond passively holding “keys.”
Acting Comptroller of the Currency Brian P. Brooks, commented on the letter:
“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.”
Brooks previously worked in the Fintech realm, including a stint at leading digital asset exchage, Coinbase.
The OCC added that financial markets are increasingly digitized and there is a need for banks and other service providers to leverage new technology and innovative ways to serve their customers’ needs.
OCC’s opinion applies to national banks and federal savings associations of all sizes and is consistent with a number of states which have already authorized state banks or trust companies to provide similar functions.
The letter is embedded below.