Banks in Louisiana are now allowed to offer crypto custody services to customers thanks to a new bill. Simply known as “802,” the bill will allow banks in the Pelican State to hold digital currencies alongside fiat assets for retail and institutional clients.
Louisiana Banks Will Offer Crypto Custody Services
At the time of writing, the crypto space has been marred heavily by crashing prices. Bitcoin, for example, has fallen by more than 70 percent from its all-time high of about $68,000 per unit last November. The currency is now trading for just a little over $20,000, and many are wondering if the space has met an untimely end.
Clearly, there are several out there that don’t think so, and believe a crypto bull market is not far off. Louisiana is the first state to pass such a law, suggesting the digital currency space is going mainstream and reaching a new level of legitimacy that people simply aren’t talking about enough in the wake of the ongoing dips.
Louisiana governor John Bel Edwards signed the bill in late June. It became law roughly ten days after the signature was recorded. A portion of the bill reads as follows:
A financial institution or trust company may provide its customers with virtual currency custody services if the financial institution or trust company has adequate protocols in place to effectively manage risks and comply with applicable laws. A financial institution or trust company may provide virtual currency custody services through third-party service providers. Prior to a financial institution or trust company offering virtual currency custody services, the financial institution or trust company shall carefully examine the risks involved in offering such services through a methodical self-assessment process.
One of the big clinchers of the bill is that digital currencies stored in standard banks or financial institutions must be insured against fraud, cyberattacks, and thievery. This is one of the big problems that has really brought the space down. With so many attacks occurring within the confines of the space, many people have lost their life savings or at least part of their crypto stashes and given that these assets are not insured under regular means, it’s rare they recover the assets.
Not Everyone’s Cool with This
The banks storing crypto assets would be required to have measures in place that keep money and financial owners protected.
While the move is being praised on one end of the spectrum, some crypto enthusiasts aren’t too happy about the direction of the bill. They claim the assets will be in the hands of centralized institutions, thereby placing their ownership into question. The crypto space was designed to give traders and users full autonomy and independence from third parties and keeping one’s crypto in the hands of a bank could likely prevent this from becoming a reality.