The fifth largest bank in the United States by total assets, the U.S. Bank, will launch a custody service for bitcoin (BTC) and cryptocurrencies for its clients. This was revealed by the financial institution through a statement released on April 27 on its website.
The bank, founded in 1968 and based in Minnesota, reported that the service will not be offered directly by them. The support will be outsourced through a company that was not identified, but has already been selected.
“We are finalizing the selection of our sub-custodian and will announce additional details in the coming weeks once the internal reviews are complete,” explained the U.S. Bank in the press release. The company hired for the safeguard would be, unofficially, the New York Digital Investment Group (NYDIG), a subsidiary of Stone Ridge.
Christine Waldron, the bank’s chief strategy officer, confirmed that the selection process was complete, but that she was not authorized to comment. Asked which cryptocurrencies would be supported, the executive told Coindesk: “It can’t just be a bitcoin story.”
The financial institution’s move would be related to the high demand it would have received from its clients interested in investing in digital assets. Among them would be pension funds, insurance companies and other corporate clients.
The bank also disclosed that it was selected by NYDIG to manage its bitcoin exchange-traded fund (ETF), should the requirement be approved by the United States Securities and Exchange Commission. In February, NYDIG filed the request in conjunction with Morgan Stanley, as reported by CryptoNews.
Banks are getting closer and closer to bitcoin
The approach of US banks towards bitcoin and cryptocurrencies was endorsed, in July of last year, by the Office of the Comptroller of the Currency. The regulatory entity opened the doors to financial institutions to provide services with crypto assets.
The argument for this decision is that banks could offer a “more secure than existing options” service, referring to companies in the bitcoin ecosystem that already operate in this field.
Support for the custody of digital assets is gaining ground among various banks on a global scale. In February of this year, the Bank of New York Mellon (BNY), the oldest in the United States, announced that it would launch, sometime in 2021, a custody service for cryptocurrencies.
“Digital assets are becoming part of the trend,” said Roman Regelman, executive director of digital business and asset services at BNY at the time.
In Europe, the German private bank, Donner & Reuschel, partnered with the company DLC Distributed Ledger Consulting GmbH to offer multiple services related to bitcoin, including sale and custody for its clients.