Recent regulatory transparency provided by U.S. banking regulator, the Office of the Comptroller of the Currency, or OCC, may give interested institutions the confidence to enter the crypto industry.
“For those of us who have been building up this ecosystem for years, it’s hugely validating of those efforts,” Diogo Monica, president of crypto custody service Anchorage, told on July 23, referring to the OCC’s actions.
“But the real significance here is for the kinds of institutional players who may have been sitting on the sidelines in the absence of clear regulatory guidance. The OCC coming out and saying that more traditional financial institutions can custody crypto effectively erases that concern.”
On July 22, the OCC proclaimed digital asset custody by federally chartered U.S. banks as permissible activity. The move provided transparency without changing any current guidelines, Morgan Creek Digital co-founder Anthony Pompliano said in a recent YouTube video.
“Yesterday’s OCC letter is a huge win for crypto,” Monica said. “Not only does it bring much needed regulatory clarity to the digital asset space in the United States, it also signals to skeptics and the wider market that this asset class is here to stay.”
Will all banks offer crypto custody in the future? “It’s not so much a question of if they will as how they will,” said Monica. Holding digital assets for customers currently requires specific technical tools and prowess — something banks may not house at present, he explained. Blockchain activity and interaction, such as staking, also brings further complications and requirements.
“Particularly when those actions are yield-generating, it will be imperative for fiduciary banks to support them through partnerships or sub-custodian relationships with a financial services platform like Anchorage,” he added.
An up and coming crypto custody outfit, Anchorage garnered $40 million from a number of companies, including Visa, announced in mid-2019. The startup has since posted a number of new developments.