US Bancorp has reentered the crypto space by relaunching its digital asset custody services aimed at institutional investment managers.
US Bancorp’s reentry follows a regulatory shift under President Donald Trump’s current administration, which rolled back a previous SEC rule that had forced banks to hold capital on their balance sheet for crypto-related activities, according to a Wednesday report by Bloomberg.
“We had the playbook and it’s sort of opening it up and executing it again,” said Stephen Philipson, head of US Bank’s institutional division. He noted that the bank plans to scale the service as demand grows and is also exploring how digital assets might fit into other areas like wealth management and consumer payments.
The Minneapolis-based bank, the fifth-largest commercial bank in the US, first launched its custody service in 2021 in partnership with fintech firm NYDIG, before it was paused due to the SEC guidance. With the rule rescinded, US Bancorp is proceeding with a renewed push.
Related: US Federal Agencies Outline Key Risks for Banks Eyeing Crypto Custody
US Bancorp to offer Bitcoin custody for funds
US Bancorp will initially provide custody services for Bitcoin (BTC), starting with registered investment funds and Bitcoin ETF providers. The bank said it may expand to include other cryptocurrencies that meet its internal risk and compliance standards.
The crypto custody service space has been led by crypto-native firms such as Coinbase, BitGo and Anchorage Digital. However, changes in federal guidance, particularly from the Office of the Comptroller of the Currency, are now giving banks more room to operate.
In 2022, BNY Mellon launched a digital custody platform to safeguard select institutional clients’ Bitcoin and Ether (ETH) holdings, making America’s oldest bank the first large bank in the country to offer the custody of digital assets.
Related: Binance taps Spain’s BBVA to offer safer crypto custody post-FTX: FT
More banks push into crypto custody
Meanwhile, a growing number of traditional financial institutions have been moving into crypto custody.
In July, Germany’s biggest bank, Deutsche Bank, announced plans to allow its clients to store cryptocurrencies including Bitcoin next year. The bank plans to launch a digital assets custody service in 2026 in collaboration with the technology unit of Austria-based Bitpanda crypto exchange.
In August, it was reported that Citigroup was weighing plans to offer cryptocurrency custody and payment services, aiming to capitalize on a market bolstered by Trump-era regulatory approvals and pro-industry legislation.
Magazine: Bitcoin’s long-term security budget problem: Impending crisis or FUD?