The Office of the Comptroller of the Currency (OCC) in the United States has published a letter that gives banks the freedom to hold cryptocurrency assets on behalf of its customers.
This is a huge step forwards the mass adoption of cryptocurrencies as it potentially opens the asset class up to millions of people in North America.
Banks, however, may not be keen on offering common digital assets like Bitcoin and Ethereum straight away, with it being more likely that CBDCs or bespoke bank tokens like JP Morgan’s coin will be offered.
Central Bank Digital Currencies have been at the centre of intense discussion over the past 12 months with the Bank of England and Banque of France beginning testing of a digital Pound and digital Euro.
As expected, the news was met with both optimism and skepticism across participants in the crypto industry.
For example, Dave Hodgson, Chief Investment Officer of NEM Group and Managing Director of NEM Ventures, said: “The move by the US OCC is a positive one and Brian Brooks, Acting Comptroller of the Currency, was no doubt instrumental in this decision.
“While a lot of the current crypto community may not wish to custody assets with a traditional bank, it is a big step forward that Federal/National banks are now allowed to custody digital assets–as their State chartered counterparts have been able to for some time now.
“At a retail level, the mass market is more comfortable with traditional banking than with private keys and crypto exchanges, so this decision should further support growing levels of adoption.”
The Office of the Comptroller of the Currency (OCC) clarifies that any USA national bank can hold onto the unique cryptographic keys for a cryptocurrency, clearing the way for national banks to hold digital assets for their clients👍https://t.co/9Xrc49VOGu pic.twitter.com/RNbeJ9Ksv2
— #JTS🌎❤️✌️ (@JTS_Global) July 23, 2020
Seamus Donoghue, VP Sales and Business Development at METACO added: “The announcement by the Office of the Comptroller of the Currency (OCC) that all nationally chartered banks can provide custody services for cryptocurrencies is the biggest news of the year in crypto markets and a complete game changer.
“With the stroke of a pen, the OCC has changed the landscape for crypto custody in the US and globally. Enabling US banks to offer crypto custody is another huge step towards mainstream institutionalization and retail access to cryptocurrencies.
“This change will be equally groundbreaking for incumbent crypto custodians. They have so far been able to grow their market share and offering without the pressure of competition from incumbent regulated banks. These institutions possess the extensive client networks and robust balance sheets that are so critical to provide investors comfort that the custodian has the financial strength and sustainability to keep their assets safe come what may.”
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