Although some regulators and government officials have argued that Bitcoin does not pass as a medium of exchange or store of value, the leading cryptocurrency has continued to score major points in going mainstream.
In its latest pro-Bitcoin move, the Texas Department of Banking issued a notice last week confirming that state-chartered banks could hold Bitcoin. These financial institutions will be allowed to store cryptocurrencies on clients’ behalf, as long as they have "adequate protocols in place" to manage the risk and comply with the law.
While this may seem like a major victory for the crypto industry, the department does not think anything has really changed. They wrote:
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.
As per the notice, interested banks can afford to store copies of private keys or accept crypto transfers into bank-controlled wallets. They can also partner with third parties to offer such services.
Is crypto adoption finally here?
Compared to the Bull Run and media hype of late 2017, the crypto industry has undoubtedly come a long way. In the later part of 2020, the sector witnessed an influx of institutional investors. However, crypto adoption is taking a new face as governments are beginning to openly embrace the sector.
Last week, El Salvador passed a bill to make Bitcoin legal tender. A few other countries have hinted at supporting cryptocurrencies. On the flip side, China has continued to intensify its crackdown on Bitcoin mining and trading.