Customers with state-chartered banks in Texas will access custody services for virtual currencies in a new announcement by the Department of Banking.
The authorized banks will need to have sufficient protocols in place to allow custody services for virtual currencies. The protocols should comply with existing laws and enhance risk management.
The state-chartered banks can offer custody services in a fiduciary or non-fiduciary capacity. In a fiduciary role, the bank will possess the customer’s asset for safekeeping, but the legal title of ownership remains with the client.
A bank offering custody services in a fiduciary capacity should have trust powers. Banks with fiduciary authority are allowed to manage clients’ virtual currency assets.
Banks can supplement custodial services with service providers with more expertise in virtual currency. Banks under the arrangement for external custody must provide oversight.