U.S. Bancorp (USB.US) is relaunching cryptocurrency custody services for institutional investment managers, becoming one of the earlier banks to venture into this increasingly competitive field. The fifth-largest commercial bank in the United States first introduced cryptocurrency custody services in 2021 through a partnership with fintech company NYDIG, but suspended these plans after the Securities and Exchange Commission issued guidance requiring custodians to hold capital on their balance sheets for such activities. However, shortly after Donald Trump began his second term this year, the SEC withdrew this regulation. Since then, the Minneapolis-based bank has been working with NYDIG to relaunch this service.
Stephen Philipson, head of U.S. Bancorp's wealth, corporate, commercial and institutional banking division, said in an interview that the bank will now offer Bitcoin custody services, initially targeting some traditional registered funds involved in Bitcoin and exchange-traded fund (ETF) providers. The digital asset custody field has long been dominated by companies whose core business is cryptocurrency, but under the new U.S. government leadership, updated regulatory guidelines from American regulators are expected to encourage larger enterprises to expand their involvement in related businesses.
In March, the Office of the Comptroller of the Currency stated that banks can participate in digital asset activities, including providing custody services, without requiring prior approval. Large financial institutions such as Bank of New York Mellon (BK.US) and Fidelity Investments both offer digital asset custody services. They compete with cryptocurrency companies such as Coinbase (COIN.US), BitGo Holdings Inc., and Anchorage Digital, with the latter being the only cryptocurrency custodian with a federal trust banking license.
"We already have the framework in place, and now we're just restarting execution," Philipson said. "As we assess market demand and as the market continues to evolve, we may further expand our scale." He also noted that the bank is exploring how to integrate cryptocurrency and stablecoin use cases with wealth management, payment, and consumer banking divisions. A spokesperson said that U.S. Bancorp will consider providing custody services for cryptocurrencies other than Bitcoin if they meet the standards.