With the recent surge in Bitcoin adoption, the Texas Department of Banking has confirmed that Texas-approved banks can now hold BTC and other cryptocurrencies for their customers.
Texas banks hold Bitcoin
In an official notice on Friday, the regulator stated that government-approved banks can offer crypto-related services to their customers as long as they “have adequate protocols to effectively manage risks and comply with applicable law”.
The tax authority also stated that since these digital currencies are present on the blockchain, the holders will need to access them with private keys.
As a result, banks can either store the customers’ private keys for them or keep the crypto assets in the bank’s custody with complete control over their new private keys. However, the decision is entirely up to the bank.
“As with the custody services, the bank has several secure storage options, each with different characteristics in terms of security level and accessibility. The bank has to decide which storage option best suits the circumstances. “
Banks can collaborate on crypto exchanges
The agency also stated that the bank must confirm the existence of adequate coverage with its insurance carrier to ensure the safety of customers’ crypto assets.
To be on the safe side, banks are advised to familiarize themselves with the risks involved in dealing with cryptocurrencies.
The Texas Department of Banking also said banks can partner with cryptocurrency exchanges to help them offer these services to their customers.
While crypto companies might see this as a new and welcome development, the agency found that this is not entirely new to their department.
“Texas state-licensed banks have long provided custody and custody services to their customers for a wide variety of assets,” the regulator wrote.
“While the custody and custody of virtual currency will inevitably be different from that associated with more traditional assets, the Texas Department of Banking believes that the authority to provide these virtual currency services under the Texas Finance Code Section 32.001 already exists consists.”
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