US Banks Can Now Offer Crypto Custody Services

US Banks Can Now Offer Crypto Custody Services…

The current year 2020 might be the year where the pandemic literally put a pause to the world. But, for the crypto industry, it has proved to be a year of progress and development. Every now and then, there has been some or the other encouraging news. The latest one is something that literally everyone is talking about. It’s that US banks can now offer crypto custody services.

On 22nd July, crypto Twitter was sent into a frenzy when this announcement came. After all, this has huge implications for the industry and it could finally make crypto mainstream. The announcement was made by the Office of the Comptroller of the Currency (OCC). In it, it was mentioned that federally chartered banks now have the permission to custody cryptocurrencies. This is a huge deal for everyone in the industry.

Mainstreaming Crypto by Offering Crypto Custody Services

There had been a long debate on this subject. It has been clear for quite some time now that crypto is here to stay. So, banks had the option to either get on board or perish under the weight of innovation. It seems like they have chosen the former option. It could literally help them stay relevant and build on top of this groundbreaking technology. The OCC in its letter has similar thoughts.

They said, “The OCC recognizes that, as the financial markets become increasingly technological, there will likely be an increasing need for banks and other service providers to leverage new technology and innovative ways to provide traditional services on behalf of customers.”

There had been a long reluctance on the side of the banks due to many reasons. For one, crypto was still not old enough as a technology. Second, crypto wallets require totally different custody requirements than other assets. The technology that would allow secure storage and transfer needed to be absolutely state of the art. Now, it seems like the banks are willing to work on all their apprehensions.

This announcement applies to all national banks and federal savings associations of all sizes. So, you could estimate that a considerable chunk of the American market now has access to crypto. This will benefit people who want to get involved in this technology but don’t want to expose themselves to risks. Some may not even be too tech-savvy to get exposure. This step will help onboard these people.

Future of Banking

It’s a great sign that regulators are looking at this as the modernizing of the banking system in the US. Banks need to prepare for a future where cryptos exist in tandem with the current financial system. As such, they need to have all the financial services that their customers would need.

Not too long ago, banks used to be very hostile towards crypto. They used to even block or close accounts of people dealing in cryptos. Now, the tides have turned and they are themselves going to provide crypto services. It is developments like these that matter the most in hindsight.