The Office of the Auditor of Currency, the division of the US Treasury that oversees banking in the country, issued a letter of explanation on July 22, explaining that national banks are permitted to provide cryptocurrency management services to their customers that extend to storing cryptocurrency keys that are assigned to currencies.

In its mission, OCC recognizes the current need for banks and other financial service providers to use blockchain technology and provide corresponding services to their clients. In addition to national banks, this permit also applies to state banks and credit / savings bank associations, also referred to as “savings”.

What will change?
Notably, the move, along with news of an expected $ 2 trillion stimulus from the Federal Reserve, pushed the bitcoin (BTC) price above the $ 11,000 mark. However, the result cannot be only short-lived. Hong Fang, CEO of OKCoin – a global cryptocurrency exchange – highlighted the importance of the move and told Cointelegraph:

“The OCC has reached an important milestone in enabling traditional banks to provide cryptocurrency custody services, thus strengthening the entire financial system and expanding financial inclusion. Although the public message did not introduce any new regulations, it did add much-needed clarification regarding banks. The national provider of cryptocurrency custody services.

According to Fang, the latest decision will be heavily influenced by Acting Currency Auditor Brian Brooks – the former legal director of US cryptocurrency exchange Coinbase. His experience in legal, compliance, and government functions has enabled him to improve his understanding of cryptocurrency custody issues in the US financial system: “The security notes from Acting Auditor Brian Brooks will help the United States continue to lead the global financial landscape.”

Impact on institutional investors
Such a development has a very strong impact on institutional investors, who are often skeptical about new industries such as cryptocurrencies. This is a step towards making crypto assets a legitimate asset class by major banks, payment companies, and clearinghouses. Sam Wyner, co-chair of Cryptoasset Services at KPMG, discussed the impact of this announcement on institutional investors with Cointelegraph, referring to the nature of custodians:

“Guarding is a paid work, and the organizational support behind a new paid job makes it more desirable. The corporate crypto market continues to grow in size, maturity and sophistication, increasing the need for custodial services. Market uncertainty increases the attractiveness of offering a new based product. Fees. ”

Weiner said that the leading global banks in the US already have robust infrastructure and systems in place for traditional custodian businesses, and the Crypto company can share that base. “By expanding the digital currency infrastructure, banks can now support the token assets of the future,” he added.

Given the incubation fees that this step entails, institutional actors are definitely the biggest beneficiaries. The impact of this rise in interest rates will inevitably affect retail investors and allow them to increase the proportion of crypto assets in their individual portfolios. “I look forward to more banks becoming more open to cryptocurrencies, with better banking channels, more public awareness and more regulatory clarity. A better user experience is better in the end,” Fang continued.

The largest institutional crypto exchange, Bakkt, has broken daily BTC futures volume records twice in the past two days, and the volume of BTC options, which has reached an all-time high in Deribit, may also be signs of a rebound in this interest. However, a clear direction has yet to be established prior to a ruling.

An opportunity for banks?
At the start of this year, 40 German banks turned to supervisory authorities to express their interest in custody licenses for cryptocurrency assets, and the German Financial Supervision Authority (BaFin) also published guidelines in March as required by companies only if clients’ private keys can access these.

Source: CoinTelegraph