Texas has announced that state-chartered banks can hold Bitcoin and have officially given the authorization for such organizations to Offer Crypto Custody Services.
A state regulatory agency has declared that state-chartered banks can be enabled to save cryptocurrencies like Bitcoin for their clients.
“The agency chartering state banks believes that the authority to provide these services with respect to virtual currencies already exists”, the banking authority said.
The notice was issued on Thursday declaring that local banks are enabled to provide and choose what crypto custody services to offer based on their business model. In addition, it was clarified that digital currencies do not exist in a physical form, but on a blockchain and require the owner to hold private keys to access them.
In this regard, agencies have permission to control customers’ cryptocurrencies, creating new private keys that will save the name of customers, allowing them to retain direct control over their own cryptocurrencies storing copies of their private keys associated with the coins.
The agency mentioned that Texas 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”.
To this end, the department also observed that banks should confirm the possibility of coverage with their insurance carrier as an action to protect their crypto holdings.
Indeed, the notice comes soon after members of the Texas House of Representatives has approved recognize cryptocurrencies under commercial law last month. In this respect, Marcus Adams, deputy general counsel of the Texas Department of Banking said: “In both state and federal regulatory agencies, we are seeing an increase in the virtual currency industry, as it continues to evolve.”
Texas is not the only state that has permitted banks to launch crypto custody services. In the United States, other jurisdictions such as Wyoming and Nebraska, have been embracing crypto custody services by state-chartered banks.