On February 5th, the Office of the Comptroller of the Currency (OCC) announced conditional approval of the conversion of Protego Trust Company, a Washington state-chartered trust company, to become Protego Trust Bank, National Association. The conditional approval was granted after thorough review of Protego’s conversion application. Protego is the second crypto-native firm to get national licensing from the OCC, following Anchorage’s approval last month. It is now authorized as a national trust bank rather than a traditional bank, meaning that it will not handle deposits. Protego is currently in the organizational phase of development and will have up to 18 months to meet the terms of its conditional approval before it converts to a national trust bank and begins to operate. Otherwise, the current charter will expire.
Protego – not just a crypto custodian
Protego is a new kind of bank designed and built specifically for institutional clients seeking opportunities within the world of digital assets. The new federal charter will enable Protego clients nationwide to hold, trade, lend and issue digital assets.
Protego Trust Bank N.A. will be a vertically integrated and fully regulated bank that’s built on blockchain and provides four primary types of services:
- Custody of digital and other assets
- A trading platform for clients of the bank
- The capability for clients of the bank to borrow and lend to and from each other
- Issuance of new digital assets
“Protego’s integrated offering will be of great benefit to institutions that want to be able to store their assets in a federally regulated bank, be able to add to or dispose of their positions by trading inside our institutional-grade platform that is already integrated with nearly every Order Management and Execution Management system, and know that they are only trading with fully vetted, identified, and compliant institutional counterparties,” said Jonathan Silverman, Protego’s Chief Strategy Officer.
Added Chris Hunter, Protego’s Head of Business Development, “The demand from institutional investors for secure and compliant access to digital assets – led by Bitcoin – is growing everyday. I think that’s one reason why we have already secured commitments for more than $1.5 billion in AUC at launch.”
OCC and the new players
The OCC is the office of the U.S. Treasury responsible for regulating national banks. Over the past year, it has made much work of integrating crypto into that purview, including giving the first national charter of this kind to Anchorage just last month.
Not everyone has been happy with the OCC’s interest in onboarding crypto firms. A consortium of state banking regulators recently filed suit against the OCC over Figure’s application for a national charter, claiming that the OCC is stretching the definition of a bank beyond recognition.
But for the new crypto custodian players like Protego, the OCC’s openness and efforts are an important prerequisite. “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. 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 OCC,” stated Greg Gilman, Protego’s founder and Executive Chair
For more news from the crypto-space, please visit https://digital-assets-custody.com/news/