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Lobbyist Asks US Regulator to Let Banks Deal In Privacy Coins

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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Last updated:

June 26, 2023

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One of America’s biggest pro-crypto lobby groups has launched a bid to persuade regulators to help adoption – opening the door for banks to get involved in crypto-powered finance and accept privacy coins too.

The call came in an open letter from Coin Center to the American Office of the Comptroller of the Currency (OCC)’s National Bank and Federal Savings Association Digital Activities.

Coin Center, based in Washington DC, represents the interest of a large number of key crypto players, including Circle, eToro, Overstock, Kraken and the Ethereum Foundation.

The comments were penned by the Coin Center Director of Research Peter Van Valkenburgh (also a member of the ZCash Foundation’s board), who wrote on Twitter,

“In a nutshell, we say that banks should hold, multi-sig sign, run nodes, and deal in privacy-enhanced crypto.”

Van Valkenburgh wrote that crypto-related activities “are similarly within core functions or else incidental functions as described in America’s National Bank Act.”

As such, he opined that “banks should be free to engage in these activities so long as they do them safely and with standards and guidance provided by the OCC.”

The research chief added that American banks should be allowed to do the following:

hold crypto
multi-sig
run nodes
run lighting nodes
mix public crypto to provide privacy
deal in private crypto tokens such as zcash (ZEC) and monero (XMR)
issue self-sovereign IDs on public chains

Coin Center is supportive of the idea of banks becoming involved in crypto custody, with Van Valkenburgh writing,

“Digital asset safekeeping services will play an essential role alongside self-custody in ensuring that Americans are never dependent on any particular institution or personal device to protect their wealth and financial independence.”

Crypto custody is set to take off in the USA after the OCC last month clarified its stance on the matter, stating that both banks and federal savings associations are allowed to hold their clients’ digital assets. The move was described by one analyst as “insanely bullish” while others warned about potential risks to Bitcoin (BTC).

Crypto custody is also set to take off in South Korea, with banks keen to move into the sector as quickly as possible – possibly gobbling up the business of a number of smaller and medium-sized crypto players.

As previously reported, last month NH Bank – one of South Korea’s biggest commercial banks – announced it would begin offering crypto custody for institutional investors, with others expected to follow suit in the coming months.