{"id":139260,"date":"2020-12-22T18:07:00","date_gmt":"2020-12-22T15:07:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/traditional-banks-offer-digital-asset-custody-amid-compliance-legislation\/"},"modified":"2020-12-22T18:07:00","modified_gmt":"2020-12-22T15:07:00","slug":"traditional-banks-offer-digital-asset-custody-amid-compliance-legislation","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/traditional-banks-offer-digital-asset-custody-amid-compliance-legislation\/","title":{"rendered":"# Traditional banks offer digital asset custody amid compliance legislation"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a509e92b954d\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a509e92b954d\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/traditional-banks-offer-digital-asset-custody-amid-compliance-legislation\/#Banks_betting_big_on_crypto\" >Banks betting big on crypto?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/traditional-banks-offer-digital-asset-custody-amid-compliance-legislation\/#Compliance_becomes_more_important_than_ever_before\" >Compliance becomes more important than ever before<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Traditional banks offer digital asset custody amid compliance legislation <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjAtMTIvNjM5OGMwZDctZTYzNi00ZWE1LWJmNjEtMDcyMDVkMDc1MzczLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a>More and more traditional banks have started announcing support for digital assets as the price of Bitcoin (BTC) continues to make headlines for record-breaking all-time highs. Even major banks like JPMorgan Chase, which previously frowned upon Bitcoin, have taken a newfound interest in the cryptocurrency. Contrary to what Goldman Sachs stated recently, JPMorgan\u2019s strategists have\u00a0noted that \u201cthe price of gold would suffer from a structural flow headwind over the coming years\u201d due to Bitcoin\u2019s growth.\u00a0<\/p>\n<p>While JPMorgan Chase is clearly taking a softer stance on Bitcoin, some leading banks are going a step further by offering clients custody services for digital assets. For example, FV Bank, a Puerto Rico-based digital bank, announced on Dec. 21 that it received permission from the Puerto Rico Office of the Commissioner of Financial Institutions to provide custody services for all major cryptocurrencies, including Bitcoin and Ether (ETH), along with support for ERC-20 tokens.<\/p>\n<p>Miles Paschini, CEO at FV Bank, told Cointelegraph that the bank will begin offering custody services integrated within its digital platform in early 2021. Both institutional and retail customers will then be able to open an account with fiat and digital asset balances. Paschini added:<\/p>\n<blockquote><p>\u201cBanks are well-positioned to provide secure custody and to provide banking services to enable a seamless experience. Puerto Rico just h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ens to be a mature financial services market which is well positioned to authorize its licensed institutions to provide these services to international clientele while adhering to the requisite Bank Secrecy Act and Anti Money Laundering requirements.\u201d<\/p><\/blockquote>\n<p>According to Paschini, FV Bank account holders will be provided cryptocurrency deposit addresses for each digital asset they wish to hold in their accounts. The digital assets will be managed in a secure and insured custodial account linked to the user\u2019s digital bank account. Services will be accessed through online and mobile banking applications.<\/p>\n<p>Nitin Agarwal, chief revenue officer at FV Bank, added that there has been great demand over the last few months from the bank\u2019s existing customers to invest in and securely hold digital assets. As such, Agarwal commented that digital assets are proving to be attractive investments to international business, institutional investors and retail customers alike: \u201cI anticipate the convergence of these products will drive growth in the bank for years to come.\u201d<\/p>\n<p>Indeed, some major banks including Standard Chartered, DBS Bank of Singapore and BBVA have also added crypto services recently. In October this year, DBS hinted at three new offerings for clients: cryptocurrency trading, custody, and a platform for conducting security token offerings. Three months later, DBS established its cryptocurrency exchange division known as the DBS Digital Exchange.<\/p>\n<p>Following this, Standard Chartered bank announced a partnership with United States-based investment management firm Northern Trust to provide institutional custody for Bitcoin starting next year. Spanish bank BBVA also <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bbva.com\/en\/bbva-launches-its-first-commercial-solution-for-the-trading-and-custody-of-bitcoin-in-switzerland\/\">announced<\/a> in early December trials for its first commercial service for the trading and custody of digital assets. The new service will be offered through BBVA Switzerland, and will make it possible to manage Bitcoin transactions and deposits. <\/p>\n<p>Moreover, Swiss banks are preparing to offer digital assets through the Swiss Stock Exchange, also known as SIX, which recently created a new program enabling banks across Switzerland to provide clients access to digital asset-related products and services, set to launch next year. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"Banks_betting_big_on_crypto\"><\/span>Banks betting big on crypto?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Wayne Trench, CEO of OSL, one of Asia\u2019s leading digital asset platforms and member of BC <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">Technology<\/a> Group, told Cointelegraph that major players such as DBS, alongside the likes of Fidelity Digital Assets and Standard Chartered, are just a few of the big names that have unveiled custody solutions for digital assets.\u00a0According to Trench, banks will continue to offer support for digital assets due to demand from the clients of traditional custodians:<\/p>\n<blockquote><p>\u201cDemand is reaching an all-time high in 2020 and we have seen relatively conservative financial institutions start to allocate investment into digital assets. One such example is MassMutual\u2019s recent purchase of $100 million of Bitcoin.\u201d<\/p><\/blockquote>\n<p>Trench added that there have also been major regulatory breakthroughs, such as the Hong Kong Securities and Futures Commission allowing Type 9 licensed asset managers to hold up to 10% in digital assets without additional terms and conditions. <\/p>\n<p>According to Paschini, digital assets and cryptocurrencies are a growing investment asset class in addition to a payment and settlement mechanism. As such, he noted that banks would be well-advised to get involved with digital assets, with Bitcoin currently outperforming the stock market. <\/p>\n<p>It\u2019s also important to point out the growing interest in digital assets from institutional investors. Not only has this caught the attention of major banks lately, but major hedge funds are taking note. Just this week, Anthony Scaramucci\u2019s multi-billion-dollar hedge fund, SkyBridge Capital, filed a formal application with the United States securities regulator to\u00a0launch a new Bitcoin fund. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"Compliance_becomes_more_important_than_ever_before\"><\/span>Compliance becomes more important than ever before<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>While it\u2019s revolutionary that banks and traditional financial institutions are adding support for digital assets, ever-changing compliance and regulatory challenges must also be taken into consideration. This has especially become the case as the Treasury\u2019s Financial Crimes Enforcement Network, or FinCEN, announced a proposed rule change for virtual currency transactions with unhosted wallets.\u00a0<\/p>\n<p>While the rule is currently a proposal, the change would mean that banks and money services businesses would be required to verify the identity of their customers while submitting reports for CVC transactions that exceed $10,000. In addition, records of CVC transactions over $3,000 would be required when a counterparty uses an unhosted wallet or \u201cotherwise covered\u201d wallet, such as those held at a financial institution not subject to the Bank Secrecy Act. <\/p>\n<p>John Jefferies, chief financial analyst at CipherTrace, a blockchain intelligence firm, told Cointelegraph that these proposed rules could impact banks supporting digital assets, noting that compliance should be a top priority:<\/p>\n<blockquote><p>\u201cIn light of the rumored Treasury Department\u2019s plans to implement regulations on self-hosted wallet transactions and FinCEN\u2019s proposed <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">Travel<\/a> Rule change that lowers the threshold at which reporting is required from $3000 to $250, compliance events could triple in 2021. This will increase the cost of compliance for banks, exchanges, and other financial institutions.\u201d<\/p><\/blockquote>\n<p>Jefferies added that regulatory agencies have also suggested more extreme repercussions, including fines and jail time, for those who fail to comply with regulations: \u201cThis elevates the stakes for banks and others adding cryptocurrency services to their offerings for the first time.\u201d<\/p>\n<p>Additionally, a CipherTrace survey conducted in December\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ciphertrace.com\/only-22-percent-of-bankers-feel-confident-detecting-crypto-related-payments\/\">found<\/a> that only 22% of bankers and financial investigators feel confident detecting crypto-related payments on their networks, suggesting the need for better risk detection. <\/p>\n<p>Paschini, however, remains confident in FV Bank\u2019s newly added support for digital assets. Paschini explained that the company is already subject to strict Know Your Customer and Anti-Money Laundering requirements, along with transaction reporting.\u00a0Rather than regulations, he believes the main challenge for banks moving forward will be adopting the correct technical infrastructure and protocols.<\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/traditional-banks-offer-digital-asset-custody-amid-compliance-legislation\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Traditional banks offer digital asset custody amid compliance legislation &#8221; More and more traditional banks have started announcing support for digital assets as the price of Bitcoin (BTC) continues to make headlines for record-breaking all-time highs. Even major banks like JPMorgan Chase, which previously frowned upon Bitcoin, have taken a newfound interest in the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":139261,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/uploads\/2020-12\/6398c0d7-e636-4ea5-bf61-07205d075373.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74862,74863,74355,71939,71511,55229,70934,67874],"class_list":["post-139260","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-bitcoin","tag-cryptocurrencies","tag-adoption","tag-banks","tag-government","tag-law","tag-regulation","tag-united-states"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/139260","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=139260"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/139260\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/139261"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=139260"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=139260"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=139260"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}