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US Banks Start Offering Crypto Custody Services

By Max Steadman – Cryptocurrency Enthusiast

In recent news, a public letter between the Senior Counsel Jonathan Gould and Senior Deputy Comptroller on July 22 wrote that the US national banks now have the authority to hold onto the cryptocgraphic keys for a digital currency wallet.

This decision proves to be a milestone, as traditional banks build and prepare infrastructures that will enable crucical cryptocurrency services for their clientele. At present, crypotocurrency specialist platfoms, such as Coinbase and Binance, are typically the authoritave custodians in the space. With this move, regulated and larger banking companies that already deliver financial custody services can now enter and influence the sector.

The letter is addressing a bank which remains unidentified, asserting that this new allowance “may offer more secure storage services compared to existing options.” Some suggest that consumers as well as investment advisors may opt for government regulated guardians to ensure the safety and security of their unique private keys and their subsequent access to their assets.

The letter also highlighted the need for digital wallets, adding that since they are built and exist on a blockchain, those who buy and sell cryptocurrency never experience a full sense of physical ownership of the asset. Furthermore, the letter said that the OCC recognized the need for banks and other service providers to increase their leveraging and application of new technology.

The letter goes on to emphasise that the banks who will be joining this space must develop and implement their new services in correspondence with the “risk management practices” surrounding cryptocurrency trading.

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