Crypto Custody
Coinbase Custody balances refer to the safekeeping of private keys with easy online client access to holdings, allowing clients to participate in a secured and active manner in crypto networks. Custody services include the deposit and withdrawal of supported crypto assets into a custodial account as well as staking.
Importance of Crypto Custody
The Crypto Custody ensures the safekeeping of private keys and crypto-addresses which is very much essential to institutional investors, though uncertainty surrounding specifically to regularize the framework and the lack of safety. Qualified custody works as a significant barrier to joining the crypto market in greater numbers.
NEWS
The Senate of Virginia in the United States unanimously approved a bill amendment request that now allows traditional banks operating in the Commonwealth of Virginia to provide virtual currency custody services.
Implementation of the Crypto Custody Service Bill: Delegate Christopher T.
Delegate Christopher T. Head introduced the bill, House Bill No. 263, back in January 2022, seeking an amendment to allow eligible banks to offer crypto custody services, “A bank may provide its customers with virtual currency custody services so long as the bank has 26 adequate protocols in place to effectively manage risks and comply with applicable laws.”
Effective Risk Management: Governor of Virginia Glenn Youngkin
The bill passed the Senate with a sweeping 39-0 vote and is waiting to be signed into law by Governor of Virginia Glenn Youngkin. Banks that intend to offer this service to clients will need to adhere to three specific requirements mentioned in the bill: implement effective risk management systems, possess adequate insurance coverage, and launch an oversight program to address risks associated with cryptocurrencies.
However, the Senate will require the banks’ customers to retain direct control of their public and private keys associated with their virtual currency, adding, “Acting in a fiduciary capacity, the bank shall require customers to transfer their virtual currencies to the control of the bank by creating new private keys to be held by the bank.”
Legislation for a State Issued Stablecoin
Other states such as Wyoming have also recently seen an introduction of legislation for a state-issued stable coin.
Just last month, the House Committee on Financial Services discussed whether regulations on stablecoins and digital assets should be addressed at the state or federal level.
Comprehensive Federal Law on Stablecoins
In this regard, North Carolina Representative and ranking committee member Patrick McHenry asked the committee to consider state-level regulatory frameworks instead of a comprehensive federal law on stable coins.
Quoting a report from the President’s Working Group on Financial Markets, Jean Nellie Liang, undersecretary for domestic finance at the Department of Treasury, said that U.S. dollar-pegged stable coin issuers both state and federally chartered banks should be held to the same standards as insured depository institutions.
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