A bill passed in the Virginian Senate allows banks to offer custodial services for bitcoin in either a fiduciary or non-fiduciary capacity once signed into law.
A bill passed in the Virginian Senate allows banks to offer custodial services for bitcoin in either a fiduciary or non-fiduciary capacity once signed into law.
- The Senate of the Commonwealth of Virginia passes a bill allowing banks to offer custodial services for bitcoin and other cryptocurrencies.
- Banks will adhere to self-assessment criteria in order to determine whether or not to offer custodial services.
- If banks choose to operate as a fiduciary it requires new private keys to be generated for and held by the bank, while non-fiduciary banks allow customers to maintain title ownership.
Delegate Christopher T. Head, Senate member for the state of Virginia, introduced House Bill 263[1] in early January 2022 to allow traditional banks operating in the Commonwealth of Virginia to offer custodial services for bitcoin and other cryptocurrencies.
“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,” the bill outlines.
In order for banks to offer custodial services they must go through a “methodical” process of self-assessment, which requires it to “carefully examine the risks involved in offering such services,” the bill provisions.
The bill continues to explain the assessment criteria, stating that expectations of the banks include implementation of effective risk management, controls for the measurement and control of relevant risk associated to the banks holding custody of cryptocurrencies, confirmation of proper insurances in place, and the maintenance of a service provide oversight programs designed to curtail risks to service providers.
The bill seeks to allow banking infrastructure
