Green Lights to Texas State Chartered Banks to Provide Virtual Currency Custody Services
Texas state-chartered banks get the green light Thursday from the regulator in Texas of the United States for providing customer custody virtual currencies services.
According to the Texas Department of Banking official documents, Texas state-chartered banks can now provide virtual currency custody services. The bank needs to have sufficient agreements to manage risks and compliances with existing applicable laws effectively.
Official documents state that the guidelines do not represent new laws but are based on Texas’s currently growing cryptocurrency industry decisions.
Marcus Adams, Assistant General Counsel for the Banking Industry of Texas, commented:
“Both at the state and federal regulatory agencies, we’re seeing a rise in the virtual currency industry as it continues to evolve, We expect our banks to start seeing demand from their customers and we want them to be prepared for that.”
Banks can choose which type of virtual currency custody service to provide based on their professional knowledge, risk appetite, and business model.
The bank may choose not to directly control the customer’s virtual currency and only store the customer’s virtual currency copy and the private key associated with the virtual currency.
In another way, the bank allows customers to transfer their virtual currency to the bank directly, and the bank holds its direct control and creates a new private key, which the bank holds on behalf of the customer.
For the provision of virtual currency services, the bank monitors related risks, guarantees the security of access, and ensures that insurance institutions have sufficient coverage.
Last year, The Office of the Comptroller of the Currency (OCC) already accepted all nationally chartered banks in the U.S. to provide custody services for cryptocurrencies since July 22 2020.
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