Written by Jasir Jawaid and Polo Rocha
The Office of the Comptroller of the Currency has concluded that national banks and federal savings associations may provide cryptocurrency custody services on behalf of customers, including by holding the unique cryptographic keys associated with cryptocurrency.
The clarification will help ensure that banks are adequately meeting the "financial services needs of their customers today," Acting Comptroller Brian Brooks said in a news release. Brooks, who has led the agency since May, was previously chief legal officer at the cryptocurrency company Coinbase Global Inc.
"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," he said.
The OCC found that the authority to provide safekeeping services extends to digital activities and, specifically, that national banks may escrow encryption keys used in connection with digital certificates because a key escrow service is a functional equivalent to physical safekeeping. Holding the cryptographic access key to a unit of cryptocurrency is an
electronic corollary of traditional safekeeping activities, according to the OCC.
In arriving at its decision, the OCC cited the "growing demand" for safe venues, such as banks, to hold cryptographic keys that are essentially irreplaceable if lost. It also noted that some investment advisers may wish to manage cryptocurrencies on behalf of customers and may wish to use national banks as custodians for the managed assets.
This article was published by S&P Global Market Intelligence on the S&P Capital IQ Pro platform.
Comments