Texas banks can store cryptocurrencies on behalf of customers

According to the published document, banks can provide such custodial services provided that they have developed appropriate policies for effective risk management and compliance with applicable legislation. Given that cryptocurrencies do not exist in physical form, but in the blockchain, the owner of cryptocurrencies has private keys with which he can access them. The regulator explained that banks can store cryptocurrencies on behalf of customers by storing copies of their private keys, while users will be able to have direct control over their crypto assets.

As an alternative, the client can transfer their cryptocurrencies directly to the bank's management through new private keys, which the bank will be able to dispose of on behalf of the client. By analogy with conventional deposits, banks have the opportunity to use several options for secure storage of cryptocurrencies, each of which will differ in terms of security and availability. Therefore, banks need to determine which storage option is best suited for cryptocurrencies, the agency says. In addition, banks are required to confirm the availability of the necessary reserves with the help of insurance companies to protect their customers from financial losses in the event of a fall in the cryptocurrency market. 

Due to the technical difficulties that may arise when storing cryptocurrencies, banks can cooperate with reliable service providers who have experience with virtual currencies. To avoid risks, banks are encouraged to conduct comprehensive audits of these service providers. The agency issued the notice shortly after the state of Texas passed a law to create a regulatory framework for investing in digital currencies. In the state of Nebraska, a bill is also being considered, according to which local banks can store cryptocurrencies.

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