A second cryptocurrency platform has received permission from the Office of the Comptroller of the Currency to operate a national trust bank.
The OCC announced Friday that it has granted conditional approval to the Seattle-based Protego Trust Co. to use a federal charter to serve investors’ digital-asset needs.
The proposed Protego Trust Bank will be limited in scope. It won’t make direct loans or take deposits, but it will provide custody services for clients to hold digital currencies such as bitcoin and stablecoins. Users of Protego's platforms will also be able to use their digital assets to engage in person-to-person lending and trading.
Even without the full powers of a bank, Protego said it expects to be busy serving a need for investors that currently have scant options for storing crypto-related assets.
“The demand from institutional investors for secure and compliant access to digital assets, led by Bitcoin, is growing every day,” Chris Hunter, Protego’s head of business development, said Friday in a press release. "I think that’s one reason why we have already secured commitments for more than $1.5 billion in assets under custody at launch.”
The OCC decision allows Protego to convert its Washington state trust charter, which was granted in June, into a federal charter. However, the company has 18 months to satisfy the terms of its OCC approval. The conditions include that Protego must apply for membership in the Federal Reserve System and purchase adequate bond coverage.
Protego will operate out of its headquarters in Seattle and sales offices in New York and Boston, and online.
Protego is the second digitally focused trust company to receive a conditional charter from OCC in 2021. Last month the agency approved an application by Anchorage Digital Bank in South Dakota.
Given the limits on their scope, neither Protego nor Anchorage applied for deposit insurance from the Federal Deposit Insurance Corp.
“We have been very fortunate to be able to work with knowledgeable and forward-thinking regulators at both the OCC and Washington State Department of Financial Institutions,” Greg Gilman, Protego’s founder and executive chairman, said in the press release.
“The OCC has made huge strides in a short period of time with respect to the approval of digital banks, and we are thrilled to have been among the first approvals issued” by the agency, Gilman added.
