U.S. Banks to Provide Custody Services to Cryptocurrency Holders

FED Approves Banks to Accept Cryptocurrency

The Office of the Comptroller of the Currency (OCC) is letting all nationally chartered banks to accept cryptocurrency, in the U.S. and provide custody services for cryptocurrencies.

Jonathan Gould a Senior Counsel and the Senior Deputy Comptroller stated in a public letter, that any national bank can now hold onto customer cryptocurrency keys and cryptocurrency wallets.

This is a huge leap for the cryptocurrency market which once was mocked and rejected by banks as well as the Government.

Cryptocurrency enthusiasts were until recently, only able to store their crypto assets on exchanges such as Coinbase, Binance, Kucoin or in cold storage wallets (electronic devices).

Banks will therefore be able to securely offer their customers a safe and secure storage option for their crypto assets. This would either be to securely hold the keys to the wallets contents in vaults or within their own secure holding systems.

What Does this Mean for Cryptocurrency Casinos?

Although, cryptocurrency casinos are regulated and licensed online casinos accepting a variety of cryptocurrencies. The industry is still in its infancy and has gone through leaps and bounds to be recognised by Governmental institutions across the Globe.

Using Provably Fair technology within the blockchain, also means cryptocurrency casinos have an advantage over regular online casinos.

U.S. citizens have been unable to play at most online cryptocurrency casinos due to restrictions. However, this approval from the FED, paves way to the market expansion, opening opportunities for cryptocurrency casinos applying for U.S. licenses.

How Will Cryptocurrency Consumers Benefit?

Similar to having fiat funds held in a bank which would enable you to carryout purchases using a debit card. Meaning cryptocurrencies held in secure bank storage will behave in a similar fashion.

As most banks restrict cryptocurrency purchases using a registered debit card, holding cryptocurrency will make this problem a problem of the past.

Cryptocurrency Mass Adoption

Since its existence, Bitcoin, the first cryptocurrency to be created off blockchain technology. Bitcoin as well as other digital cryptocurrencies have been frowned upon by the masses, despite its positive intentions.

Bitcoin has fought through arguments in the Senate for not having any store value such as gold, which is what the US dollar is pegged to. It has also been a victim to examples associated to terrorism, scams, drug purchases.

However, unlike regular paper currency, bitcoin being based on the blockchain, means every transaction is tracked and stored on the ledger which cannot be manipulated, hacked, or deleted. Unlike standard cash which cannot be monitored and has also been the prime option for elicit criminal activity.

Moreover, the simplicity of purchasing cryptocurrencies and understanding which ones to purchase, store as a safe option takes time to understand. As a result, making it difficult for regular consumers to get on board.

Digital Currency at Work in the Modern World

One of the best examples of cryptocurrencies working and bypassing regular fiat currency, would be MPESA. The M stands for mobile, while PESA in Swahili translates to money, was launched back in 2007 by the Vodafone Group.

Consumers simply purchase MPESA credit from any regular shop using local currency or US dollars to top up their mobile phone. They now have a mobile digital wallet. Simply asking a merchant for their MPESA code, enables the consumer to send the required funds immediately to the merchant and thus make their purchase. This has made Kenya almost cashless and effective particularly for people in rural areas without access to banks.

Cryptocurrency Volatility

Unpredictable upward and downward trends of cryptocurrencies are highly volatile. Meaning what might be worth $1,000 today could be worth $1 tomorrow morning.

Big cryptocurrency holders or whales as they are famously known, can manipulate the market. Depending on the volatility of the cryptocurrency, whales can carry out a big purchase, which increases the value of the market. Which sees individuals unfamiliar with the market jump on board in fear of missing out on the cryptocurrency with the objective of making a lot of money.

As the price of the crypto asset increases, the whales will simply sell all their assets at a higher profit margin and withdraw, sending the value to the bottom. This as a result sees many traders lose all their money.

Other volatility occurs when there’s good positive development, for example, as the FED agreed for bank to hold cryptocurrency in the U.S. the value of Bitcoin has shot up. The opposite is also true, any negative news on cryptocurrencies, sees the value of the market devalue.

Banks Accept Cryptocurrency and Others Follow

For years as banks and other major institutions, snubbed their noses up at cryptocurrencies, sending most value sinking into oblivion. Little did the masses know the strategy was to enable the major players to be able to buy majority holding at rock bottom prices.

Having failed to stop the cryptocurrency movement and seeing it grow further in popularity has seen the likes JP Morgan and Facebook jump on board creating their own cryptocurrency tokens.

Other major institutions that are adopting cryptocurrency or blockchain tech include:

Google
Oracle
Microsoft
Amazon
Barclays
American Express
Goldman Sachs
Morgan Stanley
HSBC
Citigroup
Credit Suisse
Deutsche Bank
UBS
Fidelity Investments
Black Rock
CME Group
Cboe
Global Markets
Nasdaq
Six Group
Bakkt

The Future of Cryptocurrencies

As Governments, countries and major institutions begin to recognise the power of blockchain technology as well as cryptocurrencies. It is inevitable that cryptocurrencies indeed have a positive part to play in society.

The big retail players are building and accumulating on cryptocurrency which will give them the first player advantage once it gains momentum and becomes simple to adopt.

Some organisations are already able to provide Crypto Visa debit cards for everyday purchases. Unfortunately, due to the volatility, holders are unable to know how much the value held in their wallets is.

Until cryptocurrencies or a specific currency finds a way to stabilize and create ease of application and purchase for all consumers, the industry still has a long way to go. Seeing banks accept cryptocurrency is the first light many have been waiting for.