The Texas Department of Banking has announced that state-chartered banks can provide cryptocurrency custody services. “The Texas Department of Banking believes that the authority to provide these services with respect to virtual currencies already exists,” the banking authority said.
Texas State-Chartered Banks Officially Authorized to Offer Crypto Custody Services
The Texas Department of Banking issued a notice to the banking industry Thursday, stating:
Texas state-chartered banks may provide customers with virtual currency custody services, so long as the bank has adequate protocols in place to effectively manage the risks and comply with applicable 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,” the notice clarifies.
The banking authority explained that each bank will choose what crypto custody services to offer based on its own expertise, risk appetite, and business model.
The bank may, for example, allow customers to retain direct control over their own cryptocurrencies and merely store copies of their private keys associated with the coins. Alternatively, the bank may take control of customers’ cryptocurrencies, creating new private keys that it will hold on behalf of customers.
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