Posted on 07/23/2020 7:05:16 AM PDT by Enlightened1
The relationship between banks and cryptocurrency in the United States has been as complicated as the concept of “money” itself. But today’s interpretive letter from the Office of the Comptroller of the Currency (OCC) may be changing all of that.
The OCC serves to charter, regulate and supervise national banks. Today’s OCC letter clarifies that national banks have the authority to provide fiat bank accounts and cryptocurrency custodial services to cryptocurrency businesses. This clarification from the OCC may open the doors for larger financial institutions to be more comfortable providing traditional bank accounts to cryptocurrency companies, as well as actually provide custodial services for customers’ private keys.
Custodial Services
In its letter, the OCC acknowledged the difference between custodial services for fiat money versus cryptocurrency, noting that because digital currencies exist only on the blockchain or distributed ledger, there is no physical possession of the instrument. Therefore, a bank “holding” digital currencies on behalf of a customer will take possession of the cryptographic access keys to that unit of cryptocurrency.
“From safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today," said Acting Comptroller of the Currency Brian P. Brooks. "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."
And while there are differences between fiat and cryptocurrency, the need to protect one’s financial wealth is the same. Currently those holding cryptocurrency can keep their cryptocurrency in a digital wallet, with an exchange or for higher net worth individuals, a Trust Company. The OCC’s statements are incredibly helpful in providing assurances to banks that they can pursue this line of cryptocurrency custodial service.
(Excerpt) Read more at forbes.com ...
That should make the upcoming bail-ins much simpler. /s
If you don’t hold the keys, then you don’t hold the currency.
It will be interesting to see how things play out.
But all of those break Bitcoin. You are correct that holding the key yourself is the whole point.
It’s probably best if the banks do an off line vault that is FDIC insured.
People should hold their own keys, and never put it on line.
The best tool for that out there today is the Ledger wallet.
Or you could just print out your wallet and lock it in a safe. I mean seriously folks, the US government is not a fan of cryptocurrency. Any proposal they make is meant to gain control of it and eventually destroy it.
JP Morgan is already providing services to the Coinbase exchange.
Kraken has recently enlisted MVB for USD deposit or withdrawal. Don’t know how it works yet. Kraken sign up is a long and overly complicated mess.
Coinbase and Uphold are much better.
First time I’ve seen Uphold. Is Uphold like a custody service? Do you need to go thru a verification process to use it?
I’m not sure if they have custody? Their prices are good, and it’s a different from Coinbase when it comes to purchasing process.
For custody I use a Ledger (have my keys) and I use Coinbase’s off line vault.
Yes you do have to go through a verification process.
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