Cryptocurrency

Now also in the United States: banks could soon hold Bitcoin and other crypto-currencies

In a groundbreaking statement, the US regulators have declared yesterday that they could allow banks, American citizens with solutions for the safekeeping of Bitcoin and other crypto-currencies offer.

The Senate has been carrying for quite some time hearings about “digital Dollars” – and China’s digital Yuan to challenge the dominance of the US dollar.

Crypto-currencies saving as traditional assets

Reuters, according to U.S. national banks and Federal savings banks associations “of all sizes” crypto-Assets are allowed to hold for customers. Behind the dictum of the US office of the “Comptroller of the Currency” (OCC) is.

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In a notice to the OCC, it means that such custody services are “a modern Form of traditional Bank activities in connection with custody services”. This is the first Time that the USA has regulations for crypto-currencies.

The Supervisory authority outlining the policy change and explained that this was to offer to “the power of a national Bank, a crypto-currency custody services for customers”. Meanwhile, you seem to understand how “keys” of digital currencies work:

“As 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 from party to party, is transmitted through the use of unique cryptographic keys.“

Therefore, “takes on a Bank, which holds digital currencies on behalf of clients, in fact, the cryptographic access key to this unit of cryptographic currency in possession,” the statement said.

In the Declaration it is explained that banks, because of their function, a “wide variety” of assets for their clients and that digital assets “are unique and hard to evaluate” and “electronically transferring” may be, fall into this category.

We expect to see a new crypto Era?

The OCC notes that the provision of such services is available in both non-fiduciary as well as fiduciary capacity permitted. This means that a Bank may store the cryptographic key that allows the control and Transfer of the crypto-currency of the customer, in Essence, for sure.

It is, however, still caution. The Supervisory authority according to which all interested financial institutions must develop “these activities in Accordance with sound risk management practices and implement the General business plans and strategies of the Bank, as they are in the OCC instructions above, bring into harmony”.

Meanwhile, the crypto-Community is on Twitter, the message – even if a small part believes that the storage of crypto in banks was contrary to the Ethos of digital currencies. Most of the features, however, that this may bring millions of new participants to the market.

Ex-Citibank-Blockchain-in-chief Ian Lee tweets, for example:

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But Lee added that the next step is not to be expected soon:

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Yesterday’s decision marked a new Era for crypto-currencies such as Bitcoin and Ethereum.

About the author

Eve Manning

Eve Manning

A native Texan, Eve first started out as a Finance Analyst and later realized that her true passion was not in trading but in writing. She leverages her experience in the Finance industry to analyse and write in-depth news articles covering the Cryptocurrencies, Economy & Finance industries.

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