US Regulator Allows Banks to Offer Crypto Custody Services
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July 22, 2020

The US government bureau that regulates national financial institutions and federal savings associations, the Office of the Comptroller of the Currency (OCC), has published a letter in which clarified its position on providing cryptocurrency custody services from banks.

According to the letter, the regulator understands there is "a growing demand" for safe places, including banks, to hold unique cryptographic keys associated with cryptocurrencies on behalf of customers and to provide related custody services.

As national banks can offer custody services for physical assets they are also allowed to provide the same services for digital assets, the OCC says.

"Because national banks are authorized to perform safekeeping and custody services for physical assets, national banks are likewise permitted to provide those same services via electronic means (i.e., custody of cryptocurrency)," the regulator said.

The Senior Deputy Comptroller and Chief Counsel at the OCC, Jonathan Gould, says a custodian’s acceptance process should provide an adequate review of the customer’s needs and wants, as well as the operational needs of the account.

"During the acceptance process, the custodian should also assess whether the contemplated duties are within its capabilities and are consistent with all applicable law," Gould added.

iHodl earlier reported that over the last 8 years, approximately $1.6 billion had been invested in crypto custody services for institutions.

The years with the largest investments were 2018 and 2020, with $703 million and $419 million, respectively.

Swiss Association Introduces New Standards for Crypto Custody

Meanwhile, the venture division of the British bank Standard Chartered PLC, which is part of globally systemically important banks, is actively developing a cryptocurrency-focused custodian.

According to Standard Chartered Ventures Head, Alex Manson, 20 financial institutions have already expressed interest in a crypto-oriented product.

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