A state regulator from Texas has reportedly provided his affirmation that regulatory greenlight has been granted to Texas state-chartered banks, to offer management for crypto coins like Bitcoin (BTC). 

Specifically, The Texas Department of Banking – a state regulatory agency in charge of chartering state banks and keeping tabs on financial services – has reportedly disclosed that the permission for banks in the area to offer crypto services in the state is officially available. 

The agency further explained that banks in Texas now have the freedom to roll out “virtual currency custody” offerings to their clients, as long as they establish appropriate protocols, dedicated to risk management and applicable regulatory compliance. 

The regulator then provided a short explanation of virtual coins, highlighting that cryptocurrencies have no physically functioning form but are rather operational across a blockchain, and hence can only be accessible via private key. 

The agency additionally disclosed that banks are able to store crypto on customers’ behalf, via two methods – holding copies of the customer’s private keys or direct management of the assets in the bank’s custody, via designing new private keys held by the bank. 

“As with the method of custody services, several secure storage options are available to the bank, each of which has distinctive characteristics pertaining to the level of security and accessibility. The bank will have to determine which storage option best fits the circumstances”. 

The department further revealed that it is advisable for the bank to offer confirmation for the presence of adequate coverage with its insurance carrier, as a means of protection for its crypto holdings.

The regulatory update reportedly surfaced following the approval of a bill by members of the Texas House of Representatives, to put crypto under the regulatory scope of commercial law in April.