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According to a public letter from the U.S. Comptroller of the Currency, the federal group responsible for the security of the banking system, banks are now allowed to hold cryptocurrencies.
This doesn’t mean you’ll be stacking Sats in an FDIC insured account at Chase. Instead, banks will be allowed to offer cryptocurrency wallets and “hold the keys associated with cryptocurrency,” according to the letter by Senior Deputy Comptroller and Senior Counsel Jonathan Gould.
Gould sent the letter, acquired by CoinDesk, to an unnamed recipient. In it he describes how banks can hold cryptocurrency on behalf of clients in the same way, say, they’d hold your jewelry in a deposit box.
“The OCC recognizes that, as the financial markets become increasingly technological, there will likely be increasing need for banks and other service providers to leverage new technology and innovative ways to provide traditional services on behalf of customers,” Gould wrote.
Why the sudden move toward crypto? The current head of the OCC, Brian Brooks, is a former crypto exchange executive turned regulator and his experience—and his Silicon Valley contacts—have led him to improve conditions for crypto on Wall Street.
This decision is, as they say, probably not good for bitcoin.
In general, anything that smacks of potential regulation drives cypherpunks up the wall and this letter, while great for folks who want to turn fiat currency into crypto and vice versa, basically says that banks will have far more control over how and when startups and enterprise companies can store and transact in crypto.
Gould wrote that the letter “reaffirms the OCC’s position that national banks may provide permissible banking services to any lawful business they choose, including cryptocurrency businesses, so long as they effectively manage the risks and comply with applicable law.”
The markets rose on the news with BTC hitting a high of $9,400 and Ethereum getting a small boost.