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United States The Almighty Buck

Banks in US Can Now Offer Crypto Custody Services, Regulator Says (coindesk.com) 50

Posted by msmash from the how-about-that dept.
The Office of the Comptroller of the Currency (OCC) is letting all nationally chartered banks in the U.S. provide custody services for cryptocurrencies. From a report: In a public letter dated July 22, Senior Deputy Comptroller and Senior Counsel Jonathan Gould wrote that any national bank can hold onto the unique cryptographic keys for a cryptocurrency wallet, clearing the way for national banks to hold digital assets for their clients. The letter marks a major development for the crypto industry. Previously, custody was the province of specialist firms, such as Coinbase, which typically needed a state license, such as a trust charter, to offer the service to large investors. Now, large, regulated financial companies that already provide similar safekeeping services for stock certificates and the like could enter the fray.

The letter, which appears to be addressed to an unidentified bank or similar entity, notes that banks may offer more secure storage services compared to existing options, and that both consumers and investment advisors may wish to use regulated custodians to ensure they don't lose their private keys, and therefore, access to their funds. "Providing custody for cryptocurrencies would differ in several respects from other custody activities," the letter said. It pointed to the need for digital wallets, adding that because they exist on a blockchain, there is no physical possession for cryptos. "The OCC recognizes that, as the financial markets become increasingly technological, there will likely be increasing need for banks and other service providers to leverage new technology and innovative ways to provide traditional services on behalf of customers," the letter said. Banks can provide both fiduciary and non-fiduciary custodian services, the letter said.
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Banks in US Can Now Offer Crypto Custody Services, Regulator Says More

Banks in US Can Now Offer Crypto Custody Services, Regulator Says

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  • oblig xkcd... (Score:4, Funny)

    by LordHighExecutioner ( 4245243 ) on Wednesday July 22, 2020 @03:12PM (#60319995)
    quote [xkcd.com]
    • "It's okay, they scan the serial numbers and make sure you can't deposit the same bill more than once."

      Yo Grark

    • Re: (Score:2)

      by GoRK ( 10018 )

      As a person who built a system to scan the serial numbers of currency a decade or so ago this particular cartoon resonates strongly with me.

  • You can't generalize the concept of Gold with the word metal. This is the same with Bitcoin; Bitcoin is the only decentralized system solving The Byzantine Generals Problem.Bitcoin is unique; Decentralization is a one time event!

    • no, Bitcoin doesn't matter , it is not money. It is a game token for gambling.

      • Why do you think Gold was the reference as money for most of the humankind? And why FIAT currencies experiment always fail: Mississippi Bubble, Assignat... (For the oldest ones.)

        • Irrelevant, even gold went to fractional reserve. The world's currency is the dollar, has been for decades and will be for at least 3 more.

          Meanwhile, the "value" of the crypto game tokens is too volatile to be anything but a game token. It can't be taken seriously.

    • Bitcoin is not the only solution solving the 2 generals problem and certainly not the first one. There are many other solutions that solve this problem more efficiently, better and cheaper. For example solutions that use variation of PBFT algorithm. Bitcoin is narrative of OGs trying to pump and keep there bags valuable. Sooner the markets realize this the better. After that happens we can talk about global financial revolution where competitive efficient solutions have value and crap gets dismissed.
      • You are wrong. These 'solutions' are just repackaging our old good database systems using marketing and buzzwords.

        https://medium.com/@jimmysong/... [medium.com]
        https://unchained-capital.com/... [unchained-capital.com]
        • That's ignorant narrative by bitcoin-maxis. You're blinded by their echo chambers. There are already technical solutions that solves BGP efficiently and cheaper than bitcoin. Just for example what I'm talking about. There are blockchain solutions (I don't want to promote any) that have on-chain governance, block generation and confirmation distributed geographically to more than one node (in bitcoin the most powerful miner defines next block), deterministic fair transaction ordering and censorship detection
          • These 'solutions' were known before Bitcoin. PoS was studied before Bitcoin, and found out to be non viable without a central authority. These 'cheap' solutions are implemented today with a 'hidden' central authority (not so hidden...). And are equivalent to a classical database.

            These experiments done before Bitcoin all failed because of this single point of failure. Bitcoin is the only decentralized system, because you have nothing to attack: No Vitalik, and no identifiable target.

            An analysis of a fi
            • I'm not talking about PoS (proof of stake). I'm pointing out byzantine fault tolerant (BFT) and probabilistic byzantine fault tolerant (PBFT) solutions. BFT is not PoS. PoS is PoW without mining but using stacking or minting to define next block. Both PoW and PoS have ultimate design flaw and that's concentration of power by utilizing financial stake. To put in layman's terms, the more rich miner or minter is more control over network he has. In the end, in both solutions you trust a rich man to not betray
              • If you want a full symmetry with all nodes, no central authority, no authoritative node using private signing key; PoW is the only working algorithm. And Bitcoin is the only decentralized implementation of this algorithm.

                No, miners have no control, they are the little hands, and have no say. The company: Bitmain thought they have control, now they are out of the game; And Bitcoin is stronger.
              • Banks and governments are centralized, and fragile. Bitcoin is decentralized and anti-fragile.
                • So is bitcoin. No matter how you look at it, in the end bitcoin is software solution and people decided to give it value. Software has bugs. Last year a severe mining-inflation bug was discovered that retained in the code for 2 years. Btw they didn't have proper CI (continue integration test) until last year. This is worrisome information for so called "store-of-value" (bullshit if you ask me). They still don't have proper consensus mechanism about how new code is accepted to the existing code base. Usually
                  • Bitcoin is a paranoid system: Every full node verifies the work of its neighbor peers . If something is wrong the node will be blacklisted. A bug was found, but this bug was not affecting all running full node versions. And some bugs were fixed on the Bitcoin code, and were never fixed on the altcoins using the same code Forking the Bitcoin code is not helpful. (No, Blockstream controls nothing...)

                    You can't change Bitcoin rules, only a few soft-forks will succeed, and Bitcoin will ultimately fossilize, li
                    • Haha, FYI not every other solution is built on bitcoin fork ;) ... Especially solutions which utilize BFT algorithms are built from scratch. Replicated state machine, what you describe, is not new and certainly not invented by bitcoin. Other solutions are using it too. Including non-blockchain related solutions and it been in use way before bitcoin existed. Little news flash, anyone can run soft-fork on their node and it doesn't need to be accepted widely. Nodes that use soft-fork upgrade will understand i
        • By the way, the links you've posted are from bitcoin maximalists. Jimmy Song is know bitcoin maxi and wannabe developer. Unplug yourself from resources like this.
          • Maximalist is nonsensical. This is just monetary common sense. Gold was the best historical money; Bitcoin has better properties.
            • You're disillusioned if you think software which can be changed any moment has better "value-store" properties than metal which requires neutron stars to merge to create new.
              • You can't change the game of chess rules. This is the same with Bitcoin. The only genuine improvements are new cryptography tricks: e.g. Schnorr signature. Everything else will be built using layers, e.g.: Lightning, Liquid...

  • If you think cryptocurrency has been volatile up to this point, wait until the professional currency manipulators at CitiCorp and BoA get involved. These are people who crash the economies of entire countries for giggles, you amateurs don't stand a chance.

  • It is my undetstanding that the the purpose of bitcoin is to keep govts in check. It prevents them debasing the currency and stealing value through inflation. If you give the keys to the bank, you are just making it easy for you bitcoin to get confiscated, for reasons. Dont think that will happen? Tell that to the people that rosevelt confisvated gold from in 1933 when they did away from the gold standard. Bitcoin is deventralized and it cant be debased, that is why govts are afraid of it.

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