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Yesterday the Office of the Comptroller of the Currency (OCC), a branch of the U.S. Treasury, announced that banks can provide digital asset custody services in the same way as they provide safe deposit boxes. It published a letter outlining its opinion in interpreting existing legislation. Not everyone is happy about the decision. The opinion clarifies that banks can continue to meet the needs of customers who want to protect their most valuable assets, including cryptocurrency today for tens of millions of Americans.“From safe-deposit boxes to virtual vaults, we must ensure banks provide their customers with the financial services they need today," said Acting Comptroller of the Currency Brian P. Brooks.
The opinion clarifies that banks can continue to meet the needs of customers who want to protect their most valuable assets, including cryptocurrency today for tens of millions of Americans.
?? Nowadays, derivative markets are huge.
Brooks has been in his position for two months and was formerly the Chief Legal Officer of Coinbase, the largest U.S. cryptocurrency exchange.
Although cryptocurrency sales seem to be booming now, cryptocurrency sector enthusiasm is not universal. Former Finnish central banker Aleksi Grym noted the irony on his personal twitter account: “Now you can trust banks with money invented because you can’t trust banks with your own money.”
In a tweet she said: “This is just like how it started for derivatives back in the 1980s: OCC interpretive letters telling the banks it’s terrific to deal in risky derivatives. It's about innovation!
It's all "client stuff" anyway.
Derivatives markets are booming today.
Finnish central banker Aleksi Grym observed the irony on his personal twitter account: “Now you can trust banks with the money that was invented because you can’t trust banks with your money.”
Back in the 1980s, the first interpretive letters were issued by the OCC, opining how banks could trade risky derivatives in a safe environment.
Why? Because innovation! And all this is "client stuff". Because innovation! Is this a coincidence? Derivatives markets are HUGE now. As a result, .
In 2009, towards the end of the Global Financial Crisis, Omarova penned a paper on the topic, asking about the crisis: “How did we get here?”. Is the risk of storing digital assets in the same place as physically keeping those assets safe?
Aside from cold wallets, the insurers don’t behave as if it is.
yavyav / BigStock Photo. A branch of the U.S. Treasury, the Office of the Comptroller of the Currency, announced yesterday that banks will be able to offer digital assets as safe deposit boxes similar to safe deposit boxes. At the end of 2019, global equity markets were worth $94 trillion (source: WFE). Though some are happy about the decision, not everyone is as such. The reason is because innovation!“It’s essential we help banks meet their financial services needs today”, said Acting Comptroller of the Currency Brian P. Brooks. But it’s the OTC market where the most significant risks lie at $559 trillion (source: BIS).
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The U.S. approached contrasts with other jurisdictions. For example, in Germany, banks have to apply to regulator BaFin for a digital asset custody license.
However, that enthusiasm is not universal: Finnish central banker Aleksi Grym observed that one cannot trust banks with any money since one can't trust banks with your money. Professor Saule Omarova, who specializes in financial sector regulation, believes this could be a slippery slope. In a tweet, she states: “This is how derivatives were considered safe and wonderful by the OCC back in the 1980s. With the exception of cold wallets, which are not online, insurers don’t behave as if it is.
