Protego Trust Company has received conditional approval from the Office of the Comptroller of the Currency (OCC) to become a federally chartered digital currency bank, making Protego the second digital currency custodian in the U.S. to receive a federal charter.
Why conditional approval?
The OCC granted Protego conditional approval because Protego is in the midst of rebranding its business into Protego Bank Trust N.A, a digital currency bank whose primary activities are digital asset custody, trading, lending, and issuance.
“The demand from institutional investors for secure and compliant access to digital assets is growing every day. I think that’s one reason why we have already secured commitments for more than $1.5 billion in AUC [assets under custody] at launch,” said Protego’s head of business development Chris Hunter.
Protego Bank Trust N.A has 18 months to complete its reorganization and meet the terms of its conditional approval before it opens its doors for business.
More companies will do the same
You can expect more digital currency service providers to become federally chartered banks in the near future, Both BitPay and Paxos have applied with the OCC to become federally chartered.
Anchorage was the very first digital currency service provider to receive a federal charter from the OCC, and both Kraken and Avanti have received federal charters through the state of Wyoming.
A federal charter allows a service provider to operate across the nation—in all 50 states—without having to apply for licenses that are specific to each state, the process that they must go through without a charter.
A federal charter also paves the way for the service provider to offer new innovative digital currency products, such as the lending products that allow consumers to earn a yield on their deposits—which Protego has in store for its customers. And the innovative financial products that live at the intersection of legacy finance and blockchain—like salaries paid in digital currency, something that Kraken mentioned they were looking to facilitate when they received their charter.
See also: CoinGeek Live panel, Regulation of Digital Assets & Digital Asset Businesses
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