On July 22, 2020, the U.S. Office of the Comptroller of the Currency (OCC) issued an interpretative letter (the Letter) confirming the authority of national banks and federal savings associations (FSAs) to provide cryptocurrency custody services on behalf of their customers. The Letter is important not just in its express validation of national bank and FSA authority, but also in its acknowledgement of the growing importance of the asset class to such entities and their clients, including investment advisers and broker-dealers that may seek to custody digital assets with banks.
The Letter specifically concludes that national banks and FSAs “may provide … cryptocurrency custody services on behalf of customers, including by holding the unique cryptographic keys associated with cryptocurrency,”1 reasoning that such services constitute an innovative way of rendering the traditional services of safekeeping and custody that banks and FSAs are authorized to provide on behalf of their clients across a wide range of assets. Indeed, although the Letter uses the term “cryptocurrency,” the OCC indicates that it is intended to apply broadly to digital assets that are not used as currencies, including to digital securities. The decision thus builds on previous OCC precedents recognizing the authority to engage in other forms of electronic safekeeping, such as providing escrow of encryption keys used for digital certificates or providing secure web-based digital storage of documents and files.2
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