Bitcoin and How Crypto will Transform the Financial World
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On January 13, 2021, the US Office of the Comptroller of the Currency (OCC) announced that it had given conditional approval to Anchorage Trust Company, a chartered trust firm, to become Anchorage Digital Bank. This has made Anchorage the first cryptocurrency services provider to have received the national bank charter in the United States. The company was quick to announce that it intended to launch innovative digital currency-based financial products in the near future.
Such recognition for the use cases of cryptocurrency in the financial sector has been pouring in over the past couple of years. In 2019, Visa, in partnership with Coinbase, released a debit card backed by cryptocurrency, which lets users convert digital currency into fiat currency to make payments. In 2020, JPMorgan and PayPal joined in, to permit crypto-based payments on their platforms.
Crypto Trust to Convert to Bank, FinCEN Extends New Rule Comment Period
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The Anchorage Trust Company, a subsidiary of Anchor Labs, an advanced digital asset platform (Anchorage), secured conditional approval this week from the Office of the Comptroller of the Currency (OCC) to convert to a National Trust Bank. As a trust company, Anchorage offers custody services related to transactions in digital assets and cryptocurrencies, as well as governance, staking and settlement services, and will continue to perform the activities of a fiduciary, agency or custodian post-conversion. As part of a conditional operating agreement underlying the conversion, Anchorage agreed to certain of the OCC’s risk management expectations as well as capital and liquidity requirements.
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As part of the Office of the Comptroller of the Currency’s (OCC) declared effort[1] to keep pace with a mounting demand for faster, cheaper, and more efficient payments, and the widespread adoption of new technologies, the agency’s Senior Deputy Comptroller & Chief Counsel issued an interpretive letter on January 4, 2021 (the “Interpretive Letter”) clarifying the permissibility of independent node verification networks (INVNs) and related stablecoins. Under the Interpretive Letter, national banks and federal savings associations (FSAs) may use such new technologies to conduct bank-permissible functions, as long as such activities are conducted in a safe and sound manner and in accordance with applicable law.
OCC Approves Anchorage Trust Company to Become Anchorage Digital Bank
The
Anchorage Trust Company, a South Dakota chartered trust company, to become
Anchorage Digital Bank, National Association.
Founded in 2017, Anchorage has emerged as a top digital asset platform serving institutions investing in the crypto sector. Co-founded by
Nathan McCauley, both early Square employees, the company manages over $100 billion dollars in transactions annually applying rigorous protocols and practices demanded from institutional investors.
In a public statement, the company noted that Anchorage Digital Bank National Association is the first federally chartered digital asset bank in history.
“This is a major milestone, not only for us as an organization, but also for the crypto industry and the wider financial world. Crypto deserves a bank, and we are immensely proud of being approved as the one to set the standard.”