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Puerto Rico-Based Digital Bank to Offer Regulated Crypto Custody in the US

A Puerto Rico-based digital challenger bank is launching a custody service for digital assets, offering clients the chance to securely exchange major cryptocurrencies from early 2021.

According to Coindesk, FV Bank announced Monday it has received permission from the Puerto Rico Office of the Commissioner of Financial Institutions (OCIF) to provide custody services for bitcoin, ether, EOS, XRP, and “many” ERC-20 standard tokens.
According to the statement, it will also allow “seamless exchange to fiat [currency].”

Recently, banks such as DBS, BBVA and Standard Chartered have been making announcements about providing digital-asset services, perfectly timed with the price of bitcoin reaching all-time highs.

At the start of this year, an announcement by the Office of the Comptroller of the Currency (OCC) opened the door for U.S. banks to take custody of digital assets. This presented an opportunity for companies such as FV Bank, a nimble innovator originally set up to provide U.S. banking services to fintech companies.

FV Bank CEO Miles Paschini stated in an interview:

“When the OCC came out with their opinion back in July, we saw that as an opening and went to our regulator and sought clarification and permission as a bank to provide custodial services to our customers. Our goal is to allow anyone, from an individual to an institution, to custody their digital assets and also have seamless banking services related to that custody.”

Puerto Rico is a Commonwealth of the United States with its own financial regulatory body, the OCIF. But all laws for banking and insurance in the jurisdiction are based on U.S. laws like the Bank Secrecy Act (BSA). Because Puerto Rico is part of the U.S. banking system, this allows FV Bank to hold a master account at the Federal Reserve Bank of New York.

“We’ll be starting out on day one with a $20 million-dollar policy and we’ll grow that policy commensurate with the assets under management,” said Paschini.

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