US Bank, Fifth-Largest US Bank, Announces Cryptocurrency Custody Service

US financial services provider US Bank announced its expansion into cryptocurrencies with a cryptocurrency custody service.

With the new service, investment managers can store private keys for Bitcoin, Bitcoin Cash, and Litecoin. According to Gunjan Kedia, vice president of the investment services and wealth management division, other cryptocurrencies such as Ethereum are next.

In addition, the bank will partner with the NYDIG sub-custodian to store the keys:

“Our clients are taking the potential of cryptocurrency as a diversified asset class very seriously. […] I don't think there is a single asset manager who is not thinking about that at the moment ”.

Currently, US Bank has about $ 8.6 trillion in assets in custody, revealed from data from the Federal Deposit Insurance Corp.

According to Kedia, US Bank is one of the first institutions with a live custody product available to investors.

In its current form, the product will only serve institutional administrators with private funds in the United States or the Cayman Islands.

Additionally, to recruit a manager, the bank will track the origin of the client's funds through industry-standard KYC and anti-money laundering reviews.

While US Bank may be among the first with a live custody product, other major banks understand the importance of the development of cryptocurrencies. Bank of America recently launched a crypto and blockchain, research team .

In addition, a large number of major international banks joined in unison against the Basel rules for crypto risks .

Lenders like JP Morgan and Deutsche Bank opposed the rule that banks must set aside a dollar in capital for every dollar in BTC they hold.

ETF on the horizon

Along with the new custodian offerings, the US Bank discusses potential cryptocurrency-related ETFs for investors . According to Kedia:

“We have a lot of funds waiting to invest in ETFs. […] Some literally want custody contracts to be signed the day the SEC approves an ETF ”.

At the moment, there are a ton of ETF applications on the desk of SEC Chairman Gary Gensler. From the Bitcoin ETF of Fidelity Investments and Bitwise to the Ethereum ETF of Kryptoin . The SEC has already delayed the VanEck Bitcoin ETF for over three years.

However, in a recent speech by Gensler, the regulator hinted at a possible endorsement for a futures-based bitcoin ETF.

While ETFs and regulations are in the air, banks and major traditional financial institutions continue to arrive in the crypto space.