Yesterday, the US Office of the Comptroller of the Currency (OCC) released guidance to the banks it regulates, US National Banks and Federal Savings Associations, that they may provide cryptocurrency custody services on behalf of customers. Stifle your yawns because while the scope of this announcement is limited to the provision of custody, I also think that this signals a sea change in US regulatory attitude about cryptocurrency.
You can see the full text of OCC Interpretive Letter #1170 (“Letter”) here
- Growing adoption by consumers and retailers (over 40 million US persons have invested in cryptocurrencies to date);
- Exchange-traded futures and options on BTC (and ETH) and the approval of a BTC futures fund;
- Spot exchanges obtaining state trust banking licenses;
The OCC points out that banks are traditional providers of custodial services and this traditional role has been found to extend even to assets that are unique, hard to value, and have no physical quality. It recognizes the need for such services with respect to cryptocurrency, including the safety and security of such assets.
Although the Letter is limited in scope to bank custody services, I think it signals the willingness of US regulators to begin to provide necessary guidance to businesses in the US. Yes, the CFTC has been at the forefront for years. But the OCC is now in the game – and I think this is a big deal.
This guidance also reflects an underlying fundamental concept that the regulatory framework in existence today is adequate to cover crypto-related activities. Businesses that follow the traditional rules can take comfort that the regulators will continue to follow the well-worn paths, at least until Congress legislatively says otherwise.
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