Texas state regulators have officially confirmed that Texas state-chartered banks are allowed to store cryptocurrencies such as bitcoin.B T c) to its customers.
The Texas Department of Banking, a state regulatory agency that charters state banks and oversees financial services, issued A notice on Thursday stated that local banks are allowed to provide crypto services in the state.
The agency noted that Texas banks may “provide virtual currency custody services to clients as long as the bank has adequate protocols in place to effectively manage risks and comply with applicable law.”
The regulator briefly explained cryptocurrencies, emphasizing that virtual currencies do not exist in physical form but are on a blockchain and thus require the owner to hold private keys to access them. The authority further stated that banks can store crypto on behalf of customers, either keeping copies of the customer’s private keys or placing the assets directly in the custody of the bank by creating new private keys held by the bank.
“With the Custody Services methodology, a number of secure storage options are available to the Bank, each of which has specific features related to the level of security and access. The Bank must determine which storage option is best suited to the circumstances. ,” the agency wrote.
The department also noted that the bank must verify the existence of adequate coverage with its insurance carrier as a measure to protect its crypto holdings.
Regulatory notice comes shortly after members of the Texas House of Representatives Passed a bill to recognize cryptocurrencies Under commercial law last month. Other jurisdictions in the United States such as Wyoming and Nebraska have been actively Embracing Crypto Custody Services by state-chartered banks with Wyoming Kraken Exchange Charter as its first crypto bank last September. Federal Chartered Bank also authorization received To provide crypto custody services in July 2020.