US Banks as Custodians of Cryptocurrency
Recently, the US Office of the Comptroller of the Currency (OCC) released a letter clarifying that national banks in the US could offer crypto custody services for crypto businesses. The clarification by the OCC could help large financial institutions gain confidence in offering bank accounts to crypto firms. Besides that, they may start offering crypto custody services for the private keys of their customers.
Crypto Custodial Services in the US
The OCC released a letter acknowledging that there was a difference between custodial services for fiat currencies and crypto. In the letter, the OCC noted that a bank offering crypto custodial services would take possession of the private keys.
According to Brian P. Brooks, who is the acting Comptroller of the Currency, the OCC had an obligation to ensure that banks could meet the financial needs of their customers. He said that the letter would help clarify that banks could continue to meet the needs of their customers of safeguarding their valuable assets, which for millions in the US, includes crypto.
OCC’s letter noted that while there were differences between crypto and fiat, the need to safeguard financial wealth was the same. Today, owners of crypto can store their crypto in a wallet, at an exchange, or with a Trust Company for high-net-worth individuals. The statement by the OCC will play a crucial role in assuring banks that they can offer crypto custodial services.
What Key Stakeholders Had to Say
According to Noah Perlman, the Chief Compliance Officer of the Gemini exchange, the announcement by the OCC had validated Gemini’s longstanding approach to crypto custody. Nathan McCauley, the CEO of Anchorage and a digital custodian, also had equally positive comments on the development. He noted that the lack of regulatory clarity had been a major hindrance to more institutional activity in the crypto sector.
However, while banks can offer crypto custody services, the letter did not extend the FDIC insurance cover to crypto assets.
Banking Services for Crypto Businesses
The letter from the OCC clarified that national banks could offer banking services to any legal business, including those operating in the crypto sector. However, banks had to be able to manage risk effectively while complying with all banking laws.
Access to banking services has always been a challenge for crypto businesses. Some banks view crypto businesses as high risk and they refuse to offer their services to them. To diversify their risk, most crypto companies usually tend to open multiple bank accounts.
What does this mean for Crypto Depository Services?
A crypto custody service with a bank will come at a small fee. However, in exchange for the fee, crypto holders are ensured the safety of their assets. The alternative to holding your crypto assets at a bank is to hold them at a crypto deposit service. One good example of such a service is Haru. Unlike a bank, which will charge you a fee, Haru will pay you an annual interest of up to 16% for holding onto your crypto. As a result, if you would like to store your crypto safely while earning from it, a crypto depository service is a better alternative.
Haru is a trusted digital asset management platform. We provide up to 16% earn rates for monthly deposits of BTC, ETH, USDT, and Terra KRT. What we offer aims to shift a paradigm of investment — investing in crypto can be stable and comfortable, too. Crypto in, more crypto out. It’s that simple.
Official Website: www.haruinvest.com
Got Questions? Visit our Haru Guidebook