The Texas Division of Banking has introduced that state-chartered banks can present cryptocurrency custody providers. “The Texas Division of Banking believes that the authority to supply these providers with respect to digital currencies already exists,” the banking authority stated.
Texas State-Chartered Banks Formally Approved to Provide Crypto Custody Companies
The Texas Division of Banking issued a discover to the banking trade Thursday, stating:
Texas state-chartered banks might present prospects with digital foreign money custody providers, as long as the financial institution has ample protocols in place to successfully handle the dangers and adjust to relevant regulation.
“Whereas custody and safekeeping of digital currencies will essentially differ from that related to extra conventional property, the Texas Division of Banking believes that the authority to supply these providers with respect to digital currencies already exists pursuant to Texas Finance Code § 32.001,” the discover clarifies.
The banking authority defined that every financial institution will select what crypto custody providers to supply primarily based by itself experience, danger urge for food, and enterprise mannequin.
The financial institution might, for instance, permit prospects to retain direct management over their very own cryptocurrencies and merely retailer copies of their personal keys related to the cash. Alternatively, the financial institution might take management of consumers’ cryptocurrencies, creating new personal keys that it’s going to maintain on behalf of consumers.
The Texas banking regulator has beforehand decided that custody providers could also be offered by a Texas state-chartered financial institution in both a fiduciary or non-fiduciary capability. If a financial institution gives custody providers in a fiduciary capability, it will have the authority to handle prospects’ cryptocurrencies as it will another sort of asset held in such capability.
Earlier than a financial institution can supply cryptocurrency providers, the administration should “conduct due diligence and thoroughly study the dangers concerned in providing a brand new services or products by means of a methodical danger evaluation course of,” the regulator continued. If the administration and board of administrators determine to maneuver ahead with the crypto providers, “efficient danger administration methods and controls have to be carried out to measure, monitor, and management related dangers related to custody of digital property.”
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