There Is Now a Federally Chartered Digital Asset Bank in the U.S.

The U.S. Office of the Comptroller of the Currency (OCC) has granted conditional approval to the digital crypto-custody platform Anchorage, creating the first federally chartered digital-asset bank in history.

Specifically, the OCC granted Anchorage a national trust charter, which means assets held by the company do not need to be insured by the Federal Deposit Insurance Corporation.

Anchorage is a start-up backed by Visa that offers custody solutions to institutional crypto traders, as well as real-time trading, and financing that allow users to take out loans or lines of credit in U.S. dollars that are collateralized by digital assets.

Image source: Getty Images.

“Anchorage Digital Bank is the first entity to have both the tech and the regulatory clarity that serious institutional participation in crypto demands,” co-founders Nathan McCauley and Diogo Mónica wrote in a blog post after the announcement.

The two added, “And as a federally chartered bank with fiduciary powers, Anchorage Digital Bank will unequivocally meet the definition of Qualified Custodian, giving institutions a straightforward way to meet their obligations under federal law.”

Interestingly, the OCC’s licensing manual says that national trust banks do not make commercial loans. But Anchorage is originating loans and lines of credit, although the distinction might be in the fact that these are backed by digital assets.

In 2020, more institutional money found its way into crypto assets such as bitcoin, perhaps contributing to the price of one bitcoin token recently topping $40,000.

JPMorgan Chase, America’s largest bank, recently wrote in a research note that the price of one bitcoin could get as high as $146,000 long term, as more investors view it as a hedge to inflation, similar to gold.

The development and legitimacy of platforms like Anchorage are likely to only drive this trend and make it easier for institutional investors to invest in cryptocurrencies.

10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Walmart wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

See the 10 stocks

Stock Advisor returns as of 2/1/20

Bram Berkowitz owns a fraction of a bitcoin, as well as some other altcoins; he has no position in any of the stocks mentioned. The Motley Fool has no position in any cryptocurrencies mentioned or any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.