US banks are searching for ways to offer cryptocurrencies

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Brian Brooks, who was appointed as the new chairman of the US Office of the Comptroller (OCC) in June of 2020, has once again caused a stir in the cryptocurrency sphere with a statement. As the top bank supervisor revealed in Laura Shin’s Unchained Podcast, U.S. banks are currently searching for ways to offer Bitcoin and other cryptocurrencies.
As reported by CNF, the US Office of the Comptroller of the Currency (OCC) published a letter in July that provided clarity that all licensed banks in the US can offer crypto custody services. The OCC thus paved the way for US banks to enter the cryptocurrency market.
In the recently published interview with Laura Shin, Brooks now shared his insights on how U.S. banks have started to explore the introduction of cryptocurrencies. Shin also addressed the uncertainty of banks and asked Brooks whether he had noticed any change in the attitude of important financial institutions toward cryptocurrencies since the letter was published.
In response, Brooks explained that, to his knowledge, banks have approached crypto custodians such as Anchorage and Coinbase to obtain their services:
“Well, what I have heard […] a number of big crypto custodians Anchorage, Coinbase, and a number of others, have been contacted by banks about whether they’d be willing to be like the third-party custody providers for national banks whose customers want to invest in Bitcoin.”
Brooks also speculated that due to the complexity of the custody of Bitcoin, banks will struggle to work with custodians or buy them to manage the cryptocurrencies of their customers.
“[…] in a world where you have institutional investors looking for a qualified custodian for their Bitcoin, and everything else, I think it is pretty likely that the trajectory will be that banks will not want to build their own custody capacity. This is very technically complex, but what they’ll want to do is either buy crypto custodians, or partner with crypto custodians to provide those services on their behalf and now they can legally do that.”
Moreover, Brooks also said that the move by U.S. banks to offer Bitcoin and others will increase the willingness of retail investors to invest in Bitcoin and will lead to a further increasing demand for BTC.
“So, if your average person thinks it’s prudent to have 50 basis points of their net worth in crypto, which you know a lot of investment advisors say is a prudent allocation, they’re going to feel much safer knowing that JP Morgan is the custodian of their crypto, than feeling like the custodian is some entity, they have never heard of, in South Dakota. So, I think the demand increase is going to be noticeable.”

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