Texas Allowed State Banks to Store Bitcoins
The Texas Department of Banking issued a notice on June 11 that government-registered banks can store cryptocurrency on behalf of customers, provided the institutions have “appropriate protocols” to comply with the law.
For miners and cryptocurrency firms, this might seem like a big win. But in the opinion of the Department, nothing has changed fundamentally.
“Texas banks have long been providing custody and custody services for various assets to their clients. While the storage and custody of virtual currencies will necessarily be different from those associated with more traditional assets, the Texas Department of Banking believes that the authority to provide these services in relation to virtual currencies already exists under Texas Finance Code § 32.001,” says in the Department’s message.
The notification enables interested banks to store copies of private keys and accept transfers in cryptocurrency to wallets controlled exclusively by banks. They may also partner with third parties to provide these services.
In addition, banks with fiduciary powers may offer fiduciary custody services. In such cases, banks will assume certain legal obligations to the client, including “to keep the asset safe and return it safe and sound upon request”.
The Office of the Comptroller of the Currency (OCC), the country’s main banking regulator, In 2020, issued similar recommendations. According to the order of the Office, cryptocurrency storage services are within the competence of national banks. This directive was followed in January 2021 by a letter authorizing banks with national charters to use blockchains and stablecoins for payment activities.
However, Acting OCC Controller Michael Xu has called for a review of the cryptocurrency regulations issued by his predecessor, former Coinbase chief and current Binance.US CEO Brian Brooks.