“We need to allow banks to hold bitcoin,” says US regulator FDIC
Jelena McWilliams, president of the Federal Deposit Insurance Corporation (FDIC), one of the top regulators, believes the time has come for banks to store cryptocurrencies, such as bitcoin, for themselves and their customers.
“I think that we need to allow banks in this space, while appropriately managing and mitigating risk,” she said in an interview with Reuters at the Money20/20 conference in Las Vegas.
McWilliams’ comments came amid the creation of an interagency team, composed by officials from the FDIC, the Federal Reserve and the Office of the Comptroller of the Currency (OCC), who will coordinate cryptocurrency policies for US banks.
“My goal in this interagency group is to basically provide a path for banks to be able to act as a custodian of these assets, use crypto assets, digital assets as some form of collateral,” she said.
No wonder this sounds like déjà vu. During the Trump administration, Brian Brooks, former General Counsel of Coinbase, established rules in the OCC in June 2020 for federal banks and savings associations to carry out custody of cryptoactives on behalf of their clients.
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“From safe deposit boxes to virtual safes, we must ensure that banks today can meet their customers’ financial services needs,” Brooks said in a letter interpreting the agency’s policy.
“This view clarifies that banks can continue to satisfy their customers’ needs to protect their most valuable assets, which today, for tens of millions of Americans, include cryptocurrencies.”
Other more traditional banks aren’t necessarily waiting for permission.
U.S. Bancorp, the country’s fifth-largest bank in terms of stored assets, said this month that it was preparing a cryptocurrency custody service for investment managers at institutions.
However, a clarity for banks would open the door to this possibility. Postponing a decision would also be bad. “If we don’t take this activity inside the banks, it will develop outside them.”