On July 22, 2020, the Office of the US office Comptroller of the Currency (OCC) issued a public letter clarifying that banks and savings associations in the US can now provide crypto custody services to customers.
The surprise decision from the OCC also directs banks to offer all authorized banking services to all lawful startups, including crypto companies.
The crypto-friendly Acting Comptroller of the Currency Brian P. Brooks noted:
“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.”
In a separate statement, the OCC explained that offering custody services for digital assets, including holding their unique cryptographic keys, is a contemporary form of bank activity linked to custody services.
The green light to offer crypto custody services in the US applies to all national banks and savings associations with a federal charter.
This Is Net-Positive For Crypto
Prior to this clarification, only startups with special licenses could control the custody of cryptocurrency on behalf of clients.
The acceptance that centralized entities for crypto safekeeping and storage are unavoidable and vital is excellent news for the emerging space, enabling more traditional institutional investors to delve into cryptos.
The OCC’s breakthrough has been welcomed by the crypto sector, with prominent personalities such as Brad Garlinghouse, and top companies hailing the decision taken by the US regulator as extremely positive.
Nathan McCauley, CEO of crypto assets custodian Anchorage, noted that the OCC decision is a positive move for the entire crypto sector, adding that a lack of clear regulations has been a big barrier to more institutional participation in the crypto markets.
Moreover, Noah Perlman, the Chief Compliance Officer at Gemini, stated that the OCC’s decision validates his company’s long standing approach to custody.
Gemini runs a unique institutional-grade custody service designed to solve the various challenges of safely storing cryptocurrency.
OCC Decision Sets Up a Bullrun For BTC
When news broke that the OCC will allow US banks to provide safekeeping and crypto custody services, Bitcoin and Ethereum broke important resistance levels at $9,500 and $250, respectively. This price action proves that the OCC clarification is bullish for the whole crypto sector.
Moreover, US banks’ custody services will offer faster fiat onramps for crypto traders as per a tweet by Su Zhu from Deribit Insights.