Texas regulator allows state chartered banks to hold bitcoin

The Texas regulatory agency has officially confirmed that Texas chartered banks can store cryptocurrencies such as Bitcoin (Bitcoin) For their customers.

The Texas Department of Banking is a state regulatory agency responsible for chartering state banks and overseeing financial services. release The notice on Thursday pointed out that local banks can provide encryption services in the state.

The agency pointed out that the Bank of Texas “can provide customers with virtual currency custody services, as long as the bank has established sufficient agreements to effectively manage risks and comply with applicable laws.”

The regulator briefly explained cryptocurrencies, emphasizing that virtual currencies do not exist in physical form, but on the blockchain, and therefore require the owner to hold a private key to access them. The agency further stated that banks can store cryptocurrency on behalf of customers by keeping a copy of the customer’s private key or by creating a new private key held by the bank and directly storing assets in bank custody.

“Like the custodial service approach, the bank can use multiple secure storage options, each with unique characteristics related to the level of security and accessibility. The bank will have to determine which storage option is best for this situation, “The agency wrote.

related: The Federal Deposit Insurance Corporation seeks insights into the role of banks in the cryptocurrency market

The department also mentioned that the bank should confirm that its insurance company has adequate insurance as a measure to protect its encrypted assets.

The regulatory notice was issued shortly after a member of the Texas House of Representatives Passed a bill to recognize cryptocurrency According to last month’s commercial law.Other jurisdictions in the United States, such as Wyoming and Nebraska, have been active Embrace encrypted hosting services State Chartered Bank, Wyoming Rent Kraken Exchange As its first crypto bank in September last year.Federal Chartered Bank also Authorized Provide encrypted custody services in July 2020.