U.S. Bank, the country’s fifth-largest retail bank, will now offer custody services for cryptocurrencies, starting with Bitcoin, the bank announced on Tuesday. New York Digital Investment Group, a fintech firm dedicated to Bitcoin, is the first crypto sub-custodian in the bank’s network of providers, the statement said.
- The services are geared toward institutional investment managers with private funds in the U.S. or Cayman Islands looking for options to securely store Bitcoin. Support for altcoins is expected to follow.
- Over the last few years, banks and other financial institutions have been increasingly venturing into the world of cryptocurrencies, from J.P. Morgan to PayPal, in order to capture increasing demand. The launch of custody services by U.S. Bank was also prompted by rising demand for crypto-related services. “Investor interest in cryptocurrency and demand from our fund services clients have grown strongly over the last few years,” said Gunjan Kedia, vice chair, U.S. Bank Wealth Management and Investment Services. “Our fund and institutional custody clients have accelerated their plans to offer cryptocurrency and, in response, we made it a priority to accelerate our ability to offer custody services.”
- Bank of New York Mellon, State Street and Northern Trust are other custody banks that have already announced plans to enter the crypto realm.
- The U.S. Bank Wealth Management and Investment Services has over US$8.6 trillion in assets under custody and administration, and US$282 billion worth of assets under management globally as of the first half of 2021. This division of the bank offers alternative investment, fund custody and fund administration services, as well as asset management products and services, corporate trust and custody services, and wealth management services.