UPDATED 22:02 EST / JANUARY 13 2021

BLOCKCHAIN

Cryptocurrency startup Anchorage granted provisional federal charter bank OK

Cryptocurrency custodian startup Anchorage Hold LLC has obtained conditional approval from the U.S. Office of the Comptroller of the Currency to become a federally chartered bank.

Now formally known as Anchorage Digital Bank National Association, Anchorage is the first cryptocurrency company to receive a federal banking charter, a notable milestone in the history of cryptocurrency startups. What the charter means is that Anchorage is now the first official digital asset bank in the U.S. with the same standards and approval as traditional banks.

Although Anchorage is not looking to establish branches in local neighborhoods, the charter allows the company to offer services such as trading and lending. “Most immediately, it puts first-of-its-kind, sub-custody services within reach for any traditional financial institution that wishes to give its clients access to digital assets,” Anchorage said in a Medium post today.

“In granting this charter, the OCC applied the same rigorous review and standards applied to all charter applications,” the OCC said in a statement. “By bringing this applicant into the federal banking system, the bank and industry will benefit from the OCC’s extensive supervisory experience and expertise.”

Founded in 2017, Anchorage offers what it calls a crypto-native digital asset custodian service for institutional investors. A custodial service holds clients’ property or money on their behalf, taking responsibility for the safety of the financial products held. The company’s offering is engineered to help institutions better safeguard their investments while getting more out of their assets.

Anchorage was co-founded by Diogo Mónica, who previously worked for Square Inc., and Nathan McCauley, former director of security at Docker Inc. It launched out of stealth mode with $17 million in funding in January 2019.

In an interview with Forbes, McCauley said that the charter will lead hundreds of banks to partner with Anchorage to tap into the cryptocurrency boom. “It will let all sorts of people come to the table who until now have been hesitant to come in,” McCauley said. “It marks a big shift in the availability of crypto assets.”

Anchorage’s charter comes as cryptocurrency prices, led by bitcoin, continue a rollercoaster ride, though at high prices that would not have been believed a month ago. Bitcoin was trading at $37,489.81 at 9:55 p.m. EST, having dropped as low as $30,525.39 Jan. 11 after peaking at $41,528.79 Jan. 8.

Image: Anchorage

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