31st Aug 2020
How Will the OCC’s Letter Impact Crypto and Payments?
While 2020 has been one of the craziest years most of us have experienced, it certainly has been an exciting one for crypto. Prices are up, and in July the Office of the Comptroller of the Currency (OCC), a branch of the Treasury that supervises national banks and thrift institutions, issued an interpretive letter outlining how US banks can interact with cryptoassets.
To sum things up, the letter did two very important things for crypto and banking:
This letter is a big deal for several reasons, and it can have a large impact on crypto and payments as we know it. Here’s how:
US regulators are not known for writing positive, progressive letters such as this, as they don’t typically break new ground. The OCC’s letter demonstrates their deep understanding of the crypto market, including the intricacies of cryptoasset custody and the challenges that crypto companies have historically faced in obtaining traditional banking services. This letter is a big step forward in paving the way for other, more cautious regulators to follow suit.
We will soon see traditional banks entering the crypto custody market, and this will make crypto custody cheaper, more secure, and more widely available. These banks also have big budgets when it comes to marketing and educating consumers on how cryptocurrency works. By simply educating people, a new wave of crypto investors will emerge.
The OCC’s letter explicitly says that national banks can provide traditional banking services to cryptocurrency businesses. This is huge because it has not been easy for crypto-focused companies to obtain traditional banking services in the past.
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