Once again, and expectedly so, the United States experience a paradigm shift in the Fintech space.
News that the Washington- Office of the Comptroller of the Currency (OCC) recently issued a letter to the effect that Federal Chattered Banks and Thrifts have the legitimate power to furnish custodial services in the Crypto spaces, have surfaced. This means that banks that fall into the mentioned category may provide safekeeping services for crypto assets.
In actual fact, custodial services has been one of the major proficiencies of federal and state banks. Ordinarily, they help customers protect both their tangible assets (physical) and intangible assets (electronic). The OCC smartly hopped into the digital train by enabling national and regional banks maximize the opportunities that nascent technologies like blockchain offer. By having a good grasp of the significance of virtual assets and the function of banks to offer custodial services even since 1998, the OCC published the enabling letter.
The OCC expressed in the said letter that, really providing crypto safekeeping services which includes but not limited to safeguarding private keys is indeed a contemporary mode of the extant traditional banking system. Custodial services happens to be an important service that conventional banks ordinarily offer. They want the general public to know that crypto safekeeping services would cover more than just keeping private keys but also goes to provide a myriad of other functions.
Brian P Brooks, the Acting Comptroller of the Currency announced that:
“From safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today,”
He continued that:
“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.”
This new development was borne out of the OCC’s understanding of the fiscal markets and the fact that they are becoming progressively virtual. Smart banks are exploring new ways of maximizing novel technologies and creative means of better serving their customers.
This way, banks are able to evolve so that they are able to maximally provide the financial intermediary functions they are well known for. These functions include serving as payment intermediaries, lending functions, and deposit functions, to mention a few.
This letter authorizes National Banks, Federal Savings Associations of varying proportions to launch into the crypto assets space (in a bid to safeguard them). It even covers some states which have already empowered state banks or trust corporations to provide custodial functions in the crypto space.