In the United States, the connection between banks and digital currency is as complicated as the thought of ‘money’ itself. Still, it all changed on Jul 22, 2020, when a letter was released from the OCC, i.e. Office of Comptroller of Currency. There are many kinds of cryptocurrencies in the U.S., in which one of the most famous and profitable cryptocurrencies is ‘Bitcoin’.
The purpose of OCC is to regulate, charter, and supervise the national banks. The OCC’s letter from Jul 22 stated that all the banks had authority now to provide cryptocurrency custodial services and fiat money bank accounts to the cryptocurrency businesses.
New doors may be opened for the significant financial organizations in the country so they’ll be more leisurely in providing the standard accounts in banks to digital-currency organizations, and custodial services are also provided for customer’s private keys, by the announcement made by the OCC.
The OCC accepted in its letter, the main difference between services to be provided fiat money and cryptocurrency noting the fact that digital currencies only exist on the blockchain or a distributed ledger, on the instrument, there is no solid interaction. So, if any bank decides to provide custodial services for cryptocurrencies, they will ask for permission to keep with them the keys for that particular currency. Visit the link techtree.com to get more info on this.
Brian P. Brooks said that we should ensure that the banks can provide the financial services that their clients require, from safe-deposit boxes to virtual vaults and that the statement given by the OCC clarifies that for many Americans, the bank can continue to satisfy the requirement safeguarding their financial assets as for the ten millions of the Americans, their assets include cryptocurrency with bitcoins.
There is an urgent demand to keep the wealth of people even though there are differences in the nature and usage of fiat currency and bitcoins. Currently, those who are holding their bitcoins or any other cryptocurrency are allowed to keep it in any digital wallet.
The statements OCC provided are beneficial in knowing the fact and giving assurance to the banks that now they can proceed with giving cryptocurrency guardianship services. For the time being, the letter doesn’t expand FDIC insurance coverage to cryptocurrency while the OCC permits the national banks for cryptocurrency.
OCC’s statement also mentioned that any lawful business, that includes cryptocurrency businesses, as long as they carefully and effectively manage the risks and complies with the applicable law, they may be provided with permissible banking services by the national banks.
When customers fund their accounts with fiat to exchange with cryptocurrency, most of the cryptocurrency businesses and exchanges rely heavily on the banking rails.
Due to the high-risk nature of cryptocurrencies, many cryptocurrency companies have struggled for long enough for finding banking partners. Jamie Dimon, the CEO of JPMorgan, who now banks the major cryptocurrency companies including some famous cryptocurrencies like Gemini and Coinbase, labelled Bitcoin as a fraud in 2017.
Can cryptocurrency be easily used illegally?
Cryptocurrency is not more often used for money laundering or other crimes than the fiat currency, and even some banks have already put some legal guardrails in place for safely banking the cryptocurrency companies.
But in many ways, fighting with money laundering and other illicit crimes, cryptocurrency is far better.
The Co-Founder and Chief Strategy Officer of Chainalysis, which is a leading cryptocurrency tracing firm, Jonathan Levin, stated that for making every cryptocurrency transaction inherently transparent, every transaction is recorded on a public ledger. By doing this, we can identify how much cryptocurrency is associated with crime, and if this case was in cash, then it will be technically impossible to verify if the cash is legal or not.
I hope that from the following article you were able to understand that Bitcoin is being accepted by the major U.S. national banks, which is clarified according to the statement passed by the OCC on July 22, 2020.
This means that Bitcoin has been made officially legal in the United States, which is a golden opportunity for businesses existing in the U.S. based on Bitcoins or other cryptocurrencies. Even further, some advantages have also been mentioned in the above article for Bitcoin (cryptocurrency).