U.S. Bank Announces Bitcoin Custody Service

• U.S. Bank will make cryptocurrency custodial services available to investment managers, according to CNBC.
• U.S. Bank is not the first major player to make such a move.
• The decision would suggest that institutional interest in cryptocurrency is continuing to grow.

U.S. Bank, the fifth largest retail bank in the United States, announced its Bitcoin custody service in a press release Tuesday.

U.S. Bank, which currently has custody of $8.6 trillion in assets, will initially make custody services available for Bitcoin .

Custody services for Bitcoin Cash, Litecoin, Ethereum and other assets will likely come over time, according to the vice chair of U.S. Bank’s wealth management and investment services division, Gunjan Kedia.

This move would suggest that deeply entrenched U.S. financial institutions and their clients are becoming increasingly interested in cryptocurrencies. In an interview , Kedia said, “Our clients are getting very serious about the potential of cryptocurrencies as a diversified asset class…I don’t believe there’s a single asset manager that isn’t thinking about it right now.”

While fund managers could buy digital assets themselves (and therefore have to store their own private keys), many want the legacy financial institutions that already safeguard trillions in assets to secure their crypto assets for them.

The service will be offered in partnership with NYDIG, a Bitcoin subsidiary of Stone Ridge Asset Management.

Other large banks have already made similar moves, seemingly back-to-back. In February, BNY Mellon (NYSE:BK) announced that it would offer its clients Bitcoin custody. Roman Regelman, BNY’s CEO of Asset Servicing and Head of Digital, acknowledged that “digital assets are becoming part of the mainstream.”

In March, within days of Morgan Stanley (NYSE:MS) announced it would be launching a “full spectrum” of investment products in digital assets. Mary Rich, Goldman’s VP of Digital Assets, said the prospect of blockchain being the “dawn of new Internet”—as well as the desire for a hedge against inflation—might explain their clients’ interest.

Moreover, Bitcoin fund along with custodial services.

As of May, hundreds of banks across the U.S. had already enrolled in the New York Digital Investment Group’s (NYDIG) crypto custody program. The president of NYDIG, Yan Zhao, has warned that banks will lose customers to newer companies like Coinbase Global (NASDAQ:COIN), Square (NYSE:SQ), PayPal Holdings (NASDAQ:PYPL), and Robinhood (NASDAQ:HOOD) if they do not provide crypto services.

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An August survey of U.K. institutional investors and wealth managers easier for institutions to do so.

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