The adoption of digital assets in legacy traditional systems is fast. In the middle of the year, positive shifts occurred in the digital asset storage industry when the Office of the Comptroller officially announced that all US national banks could offer cryptocurrency storage services.
Although this measure is positive for the ecosystem, it has not yet been accompanied by a thorough assessment of its technological infrastructure, such as asking questions such as: Where are these newly acquired digital assets stored?
One thing is clear: We have entered a new financial model that requires a different approach to asset protection.
Digital assets offer a lot of potential for wealth, but storage service providers have a responsibility to ensure that their customers don’t turn into another number in global crypto attacks, which peaked at $ 1.4 billion in June this year.
According to the annual report of the Financial Action Task Force on Money Laundering, the lack of infrastructure in the industry limits compliance and the safe custody of assets. As traditional financial markets start to sweep the room, they must develop robust and tailored technical solutions with the power of the legacy system.
Banks that store cryptocurrencies are a positive step in developing digital assets
When the first deputy commissioner stated in a letter that banks could store encryption keys, it was clear that the banks were alert. It is a major sign of maturity in the industry and a better understanding and use of assets. The OCC solution will increase confidence and development in industry regulatory agencies.
Through this step, banks have a unique opportunity to drastically increase the opportunities for wealth of millions of people around the world by owning digital assets. They can increase economic inclusion or prevent the collapse of the national economy.
But they must do it right; They must understand how to manage risk effectively, how to comply with local and international laws and how to hold clients’ assets accountable.
Conventional banks are the fast pony, and they have to invest in telegraph lines.
The history of traditional banks and new suppliers of digital fintech assets can be compared to the ancient history of Western Union and Pony Express. In the Wild West of the United States, messages were sent via express pony from one horse station to another. Knights carried messages on horseback for thousands of miles, and they had messages from coast to coast. When Western Union got together and installed telegraph poles, the speedy pony suddenly became obsolete.
The traditional economic system and the new economic system will operate in parallel, but two different systems will be opened at the same time. We will continue to make payments, and investments will continue to be investments. But the overall infrastructure they are working on will be very different from horse-drawn carriages and cars.
Technology can quickly and drastically change the situation, and banks need the right channels. This is a defining moment for fintech players to step up their efforts and steer banks in the right direction on the path to digital assets.
The economy of the future is growing rapidly, and if banks do not use appropriate protection and regulation mechanisms, assets are at great risk.