Bitcoin prices pulled back in recent days, but there’s big news on the horizon for the cryptocurrency landscape. The U.S. Office of the Comptroller of the Currency is preparing to reveal the first national “crypto bank charter.”
That could go a long way toward boosting acceptance and adoption of digital assets and boost the case for blockchain technologies. There are multiple reasons the OCC news is important.
OCC head Brian Brooks “said young companies that could offer a full suite of financial services should be chartered as banks so its customers don’t have to exit their investment assets into traditional bank account,” reports Tanaya Macheel for Blockworks.
Among the myriad issues facing Bitcoin and other cryptocurrencies is adoption. When will crypto become more widely accepted and used for mainstream activities, such as basic payments and money transfers?
Bitcoin is still in its formative stages. Despite its relative youth, the digital currency space has rapidly gained a reputation for volatility.
Issues such as scalability must also be resolved before cryptos gain wider acceptance. Regulatory hurdles also remain, including central banks in some countries outright banning transactions denominated in cryptocurrencies.
“In 2019 the State of Wyoming created a special purpose depository institution charter for companies that want to offer digital currency services. The cryptocurrency exchange Kraken became the first crypto company to become a regulated bank, under that charter, in September. Avanti, a bank that plans to offer a tokenized U.S. dollar, custody of digital assets and trading services with other customers, received the same license in November,” reports Blockworks.
Yet there are many catalysts for increased Bitcoin adoption. Millennials, the rise of China, demand for privacy, rising interest for alternative investments, and headwinds among traditional assets are significant factors that will continue to fuel demand for cryptocurrencies.
“The OCC plans to evaluate applicants for the new charter with the same standards and rigor it would any traditional bank, Brooks said,” finishes Blockworks.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.