What Happened: A notice issued by the Texas Department of Banking on June 10 shows that state-chartered banks can provide customers with virtual currency services on condition that the bank has applicable protocols in place to manage risks and comply with the law.
“While custody and safekeeping of virtual currencies will necessarily differ from that associated with more traditional assets, the Texas Department of Banking believes that the authority to provide these services with respect to virtual currencies already exists pursuant to Texas Finance Code § 32.001,” stated the notice.
Why It Matters: The move to officially allow banks in Texas to custody crypto comes after a number of crypto companies, including crypto miners, have moved to the state to take advantage of its more crypto-friendly regulatory environment.
Marcus Adams, assistant General Counsel at the Texas Department of Banking, reportedly told CoinDesk that the state has been making decisions based on the growing popularity of crypto in the region.
“Both at the state and federal regulatory agencies, we’re seeing a rise in the virtual currency industry as it continues to evolve,” Marcus said. “We expect our banks to start seeing demand from their customers and we want them to be prepared for that.”
State banks can now store copies of keys from crypto wallets and accept cryptocurrency transfers from customers while also being permitted to partner with other companies to provide such services.
“The point of the notice is to make it clear to banks that under the existing law, they can provide these services,” he added.
“How soon we see Texas state-chartered banks actually start offering these and get these products and services in place is really dependent on the individual banks and what kind of resources they have available.”
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