Texas regulator permits state-chartered banks to carry Bitcoin

By Clark

The Texas House of Representatives passed a bill to acknowledge cryptocurrencies beneath commercial law last month.

A Texas state regulator has formally stated that Texas state-chartered banks are allowed to store cryptocurrencies like Bitcoin (BTC) for their customers.

The Texas Department of Banking, a state administrative body chartering state banks and management monetary services, issued a notice on weekday stating that native banks are permissible to produce crypto services within the state.

The agency noted that Texas banks “may offer customers with virtual currency custody services,  because the bank has adequate protocols in place to effectively manage the risks and fits applicable law.”

The regulator in brief explained cryptocurrencies, stressing that virtual currencies don’t exist in an exceedingly physical kind, however on a blockchain and so need the owner to carry personal keys to access them. The authority additionally declared that banks will store crypto on customers’ behalf, either by keeping copies of the customer’s personal keys or holding the assets directly within the bank’s custody by making new personal keys controlled by the bank.

“As with the strategy of custody services, many secure storage choices are available to the bank, every of which has distinctive characteristics relating to the level of security and accessibility. The bank can confirm that storage possibility most closely fits the circumstances,” the agency wrote.

The department additionally mentioned that the bank ought to ensure the existence of adequate coverage with its insurance carrier as a way to guard its crypto holdings.

The restrictive notice came shortly when members of the Texas House of Representatives passed a bill to acknowledge cryptocurrencies beneath law last month. Different jurisdictions within the U.S.like Wyoming state and Nebraska State are actively embracing crypto custody services by state-chartered banks, with American state chartering Kraken exchange as its 1st crypto bank last September. Federally chartering banks additionally received authorization for providing crypto custody services in July 2020.