In the United States, the Office of the Comptroller of the Currency (OCC) has just granted the right to banks to offer cryptocurrency custody services, including Bitcoin, to their customers.
Banks enter the crypto game
In an letter published Wednesday, July 22, the US Office of the Comptroller of the Currency announced important news for the cryptosphere. Banks, national savings banks and federal savings associations can now store cryptocurrency .
“The OCC concludes, for the reasons discussed below, that providing
cryptocurrency custody services, including holding the unique cryptographic keys associated
with cryptocurrency, is a modern form of these traditional bank activities.”
The announcement then addresses the specifics of the service, while recalling the concept of private key:
“Because digital currencies exist only on the blockchain or distributed ledger on which they are stored, there is no physical possession of the instrument. Instead, the right to a particular unit of digital currency is transferred from party to party by the use of unique cryptographic keys. Therefore, a bank “holding” digital currencies on behalf of a customer is actually taking possession of the cryptographic access keys to that unit of cryptocurrency”
The OCC takes the opportunity to clarify that these custody services apply to both fungible and non-fungible assets .
Until now, the custody of crypto-assets has been reserved for a handful of specialist companies, such as Coinbase, Fidelity or Bakkt , which have licenses intended for this purpose. This announcement is like a bombshell and represents a major step forward in the adoption of cryptocurrencies.
Once custodial services were extended to all banks, it would not be impossible to see the emergence of crypto lending or savings services, managed by banks. Totally the oposite of what cryptocurrencies are meant to be!
The basis of cryptos concepts questioned
However, this announcement goes against the very foundation of cryptocurrencies. Originally, Satoshi Nakamoto created Bitcoin in order to have an alternative monetary system that is fully decentralized and out of the control of banks . This is why it seems normal to find a certain irony in the situation.
It remains to be seen whether the banks will be willing to offer such services to their customers. Obviously, companies like Ledger are rubbing their hands, probably anxious to see new potential customers emerge for their custody solutions.