- Texas State has just passed a new law regarding crypto custody in banks.
- The notice states that state-chartered banks may store crypto on their clients’ behalf.
- Although the update doesn’t change much, seems like Texas is warming up to crypto.
Earlier today the Texas Department of Banking issued a notice regarding crypto custody in banks. The notice stated that state-chartered banks may store crypto on clients’ behalf. This is only if they have “adequate protocols in place” for complying with the law.
To clarify, the Texas state has given state-chartered banks the go-ahead to custody crypto. They can do so based on standard risk tests by the banks themselves. However, before Texan crypto enthusiasts celebrate this, it is important to know that nothing’s really changed.
The notice read,
“Texas state-chartered banks have long provided their customers with safekeeping and custody services for a variety of assets. While custody and safekeeping of virtual currencies will necessarily differ from that associated with more traditional assets, the Texas Department of Banking believes that the authority to provide these services with respect to virtual currencies already exists pursuant to Texas Finance Code § 32.001.”
It will give interested banks the option to store copies of private keys. They can even accept cryptocurrency transfers into wallets controlled by the banks alone. For this reason, they may also partner with third parties for these services.
Banks with trust powers can offer fiduciary custody services as well. This would put them under certain legal obligations to clients. This especially includes to “keep the asset safely and to return it unharmed upon request.” Still, it seems that Texas is gradually warming up to the crypto industry. Recently, Governor Greg Abbot took to Twitter to promote a new law about the state’s use of blockchain technology.