The U.S. Office of the Comptroller of the Currency (OCC) announced that financial institutions are allowed to provide cryptocurrency custody services to the public.

According to the latest public letter released by the Office of the Comptroller of the Currency (OCC) in the United States, banks and other federally regulated financial services providers can offer cryptocurrency custody services to the public without needing special authorization. This move provides a significant push for cryptocurrencies to enter the mainstream market.

Regulated Institutions Can Provide Cryptocurrency Custody Services

The Office of the Comptroller of the Currency (OCC), a division of the U.S. Department of the Treasury, issued a public letter yesterday clarifying the rights and legality for national banks and federal savings associations to provide cryptocurrency custody services to customers. The organization stated in the letter that offering cryptocurrency custody services, including safeguarding cryptocurrency private keys, falls within the modernization of traditional bank custody services. OCC Acting Comptroller Brian P. Brooks stated in the announcement:

“From safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers today. This opinion clarifies that banks can continue satisfying their customers' needs for safeguarding their most valuable assets, which today for tens of millions of Americans includes cryptocurrency.”

Previously, only institutions with special licenses could offer cryptocurrency custody services to the public. However, with the OCC's statement, any entity regulated by the federal government to provide custody services for traditional assets or similar services now have the authority to provide cryptocurrency custody services to users.

Cryptocurrency Moving Towards Mainstream Markets

On the other hand, the letter also reiterated the OCC's position that national banks can provide banking services for any lawful business, including cryptocurrency-related businesses, as long as they can manage risks effectively and comply with applicable laws.

Most cryptocurrency businesses and exchanges heavily rely on banking services to facilitate fiat currency on-ramps for customers to fund their accounts for purchasing cryptocurrencies. However, due to the speculative nature and money laundering risks associated with cryptocurrencies, cryptocurrency service providers (such as exchanges) have often faced challenges in finding banking partners. Nevertheless, a significant milestone in the U.S. cryptocurrency market this year was when financial giant JPMorgan announced it would provide banking services to two cryptocurrency exchanges, Gemini and Coinbase.

For cryptocurrency investors, the opening of banking services to cryptocurrency service providers and regulators granting banks the authority to provide cryptocurrency custody services to the public are significant bullish factors. They serve as pivotal milestones and prime examples of cryptocurrencies moving towards mainstream markets.

CEO of Aegis Custody, Wei Qiaojie, commented: "Following Germany's opening of bank custody for digital currencies, U.S. banks have also joined the digital currency ecosystem, providing more opportunities for the widespread use of digital currencies. The line between fiat and digital currencies will become increasingly blurred in the future, indicating that more physical assets will be digitized. The technology development that follows will focus on how to securely custody digital currencies, with blockchain's multi-signature encryption design playing a crucial role in security and business process integration, including software and hardware integration, operational process implementation, and risk control cybersecurity design."