Allow bank cryptocurrency custody
It was revealed that the Texas Banking Bureau has granted permission to custody crypto assets (virtual currency) to state-approved banks on June 10. A notification was issued confirming that the standard risk assessment by the bank itself was sufficient to provide custody services.
The notice states, “We ensure that Texas-certified banks can provide cryptocurrency custody services as long as they properly manage risk and are well-equipped to comply with the law.” ..
He also said that how banks implement custody services varies depending on the bank’s expertise, risk tolerance, and business model.
For example, it is the user who manages the cryptocurrency directly, and the bank can only keep a copy of its private key. Alternatively, the bank can directly manage the user’s cryptocurrency to create a new private key held by the bank.
When providing custody services as a trust business, it is necessary to have trust authority, so it may be necessary to comply with relevant laws. Banks now have the same authority to manage cryptocurrencies as they do with other types of assets.
Required risk management
The notice stated that “it is the responsibility of management to carefully consider the risks associated with the provision of new products and services,” and pointed out the following three directions regarding the risk management system.
- Operation management of related policies and procedures
- Technical management such as access control and authentication
- Physical management such as hardware and data protection unique to the virtual currency to be stored
In addition to this, it is also necessary to confirm whether the insurance company used by the bank provides sufficient compensation to the cryptocurrency service.
National level custody permit policy pending
At the national level, the United States has come up with policies similar to those issued by Texas this time. The US Office of the Comptroller of the Currency (OCC) has announced that “banks can provide cryptocurrency custody services.”
This policy was submitted along with other policies that would support the cryptocurrency industry when Brian Brooks was acting as the Deputy Board of Audit. However, Brooks resigned due to the change of government. Currently, these policies are on hold as “need to be reviewed.” As a result, Texas is one step ahead in allowing banks to use cryptocurrency custody.
Relation: US Office of the Comptroller of Currency to review policy policy related to virtual currency
Texas cryptocurrency bill
Texas is known for its advanced regulatory environment for blockchain and cryptocurrencies.
On the 8th, it has just passed a bill that positions virtual currencies in the commercial law and provides a legal basis for companies’ handling of virtual currencies. It also establishes a clear framework for the right to manage virtual currencies, and includes important matters for conducting virtual currency custody. Together with this announcement, it is likely to support the cryptocurrency industry.
Two other bills have been submitted to Congress. The first is a bill that guarantees people the right to use exchanges, including “digital currencies,” when trading goods and services. The other is a bill that lists virtual currencies as one of the “cash equivalents” in regulated sports betting.
In addition, a bill to foster blockchain has been submitted, and Texas is one of the areas of interest from related industries.
Relation: New bill passed in “Texas, USA” where mining industry develops, virtual currency is positioned as commercial law
Reference: NCSL, Texas
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“Cryptocurrency” means “cryptographic assets”