The U.S. Bank Launches Bitcoin Custody Services

Overview

  • U.S. Bank, the country’s fifth-largest retail bank, stated on Tuesday that fund managers can now use its bitcoin custody service.
  • With the support of sub-custodian NYDIG, the product will allow investment managers to hold private keys for bitcoin, bitcoin cash, and litecoin.

U.S. Cryptocurrency Investment Services

According to the most recent data from the Federal Reserve, U.S. Bank National Association, the fifth largest commercial bank in the United States, launched a crypto custody service geared at investment managers on October 5.

Gunjan Kedia, vice chair of the bank’s wealth management and investment services division, told CNBC that the new service will “help investment managers store private keys for bitcoin, bitcoin cash, and litecoin with assistance from sub-custodian NYDIG” and that “support for other coins like ethereum is expected over time. 

U.S. Bank
Source: Ledger Insights

The Blog Post

The blog post by U.S. bank stated the following

  • U.S. Bank Global Fund Services will offer a new cryptocurrency custody product for customers with the engagement of a sub-custodian for fund servicing. We are finalizing our sub-custodian selection and will announce additional details in the coming weeks once internal reviews are final.
  • We recently announced our investment in Securrency – a developer of institutional-grade blockchain-based financial and regulatory technology, which named U.S. Bank among investors in its latest round of funding.
  • U.S. Bank has been selected to administer NYDIG’s ETF bitcoin fund this year, pending regulatory approvals. It expands on the bank’s long-standing private fund servicing relationship with NYDIG.

Bank of New York Mellon, State Street, and Northern Trust are among the major US institutions that have already disclosed their crypto custody plans.

Kedia also told CNBC that “the potential of cryptocurrencies as a diversified asset class” is something that every asset manager she knows is excited about.

It seems that after the release by the Office of the Comptroller of the Currency (the “OCC”) of Interpretive Letter #1170 on 22 July 2020, which permitted OCC-regulated banks to custody virtual assets, Kedia “surveyed the firm’s biggest clients to determine if their interest was genuine” and discovered that “interest in crypto was broad and not limited to niche players, and that clients wanted the bank to move quickly.”She stated that “What we were hearing across the board, is that while every currency might not survive – there may not be room for thousands of coins— there’s something about the potential of this asset class and the underlying technology that would be prudent for us to stand up support for it.“ She also said that is U.S. Bank is “one of the first institutions to have a live custody product available.”

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