The OCC will allow banks to custody crypto, Visa has a digital currency playbook and a digital dollar is essential to America’s economic edge, said experts at a U.S. Senate hearing.
The big idea
A change is in the air. In a letter yesterday, the Office of the Comptroller of the Currency (OCC) announced all nationally chartered banks in the U.S. will be able to provide custody services for cryptocurrencies.
This marks a major turning point for the crypto industry, long reliant on specialist custodians, typically licensed through states, to offer services to large investors. But it also signals a changing attitude in the nature of money.
“The OCC recognizes that, as the financial markets become increasingly technological, there will likely be increasing need for banks and other service providers to leverage new technology and innovative ways to provide traditional services on behalf of customers,” the letter said.
Brian Brooks, a former Coinbase exec who joined the OCC as Acting Comptroller earlier this year, is just one of a number of crypto-friendly regulators in high positions. U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton is likely to become the next U.S. Attorney for the Southern District of New York, while ‘Crypto Mom’ Hester Peirce has been tapped for a second term as an SEC commissioner.
It’s not out of the question for more crypto-forward legislation or administrative actions to follow this year.
Still, the growing governmental acceptance of crypto comes with costs. Banks custodying digital assets will have to conform to local laws and follow “sound risk management practices,” the OCC letter states, placing these assets under watchful eyes.
Whether this is antithetical to crypto’s original ethos, or may stifle breakneck development is an open question. But it’s worth asking what “being your own bank” means.
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