U.S. Bancorp has officially relaunched its bitcoin custody services, a move that comes in the wake of recent shifts in regulatory guidance that previously compelled banks to classify crypto-related assets as liabilities. The Minneapolis-based financial institution made the announcement on Wednesday, introducing services designed for institutional investment managers managing registered or private funds who are looking for secure safekeeping solutions for bitcoin.
In this renewed effort, U.S. Bancorp has partnered with NYDIG, a prominent bitcoin firm, which will serve as the sub-custodian for the assets. U.S. Bancorp will maintain its role as the intermediary for clients. Notably, the bank has expanded its offerings to include custody services for bitcoin exchange-traded funds (ETFs), allowing it to provide comprehensive solutions for investment managers in need of both custody and administration services. “This evolution enables us to better serve the needs of our clients as they navigate the digital asset landscape,” stated Stephen Philipson, vice chair and head of wealth, corporate, commercial, and institutional banking, in a press release.
The decision to resume these services comes at a time when the political landscape regarding cryptocurrency in the U.S. is shifting, particularly under the Trump administration. July witnessed the passage of the GENIUS Act, which lays out a regulatory framework for stablecoins. The swift signing of the bill into law by President Trump has reignited interest among banking giants like Bank of America and Citigroup, who are looking at offering their stablecoins for facilitating digital payments.
In contrast, the regulatory environment during the Biden administration was characterized by a more skeptical approach toward digital assets, with regulators often discouraging investment in cryptocurrencies and rejecting numerous applications for new crypto products. U.S. Bancorp initially launched its bitcoin custody services in 2021 due to increasing client demand for cryptocurrency offerings. However, it halted these services less than a year later following the issuance of guidance from the Securities and Exchange Commission (SEC) indicating that banks and financial institutions would need to treat cryptocurrencies held in custody as on-balance sheet liabilities. This requirement would have imposed capital-related impacts that would diminish the profitability of such services, according to a spokesperson from the bank.
With the recent repeal of the SEC’s guidance earlier this year, U.S. Bancorp finds itself in a favorable position to explore cryptocurrency offerings. The bank has demonstrated a proactive approach in the digital asset space, evaluating potential new crypto-related services. CEO Gunjuan Kedia underscored the bank’s focus on integrating stablecoins into its large payments business, stating the company is “quite ready to pilot” its own stablecoin. However, Kedia acknowledged that any immediate revenue impact from such products is unlikely, citing the need to resolve various issues related to technology and market structure.
As U.S. Bancorp navigates these developments, the institution, which boasts approximately $686 billion in assets, manages over $11.7 trillion in assets under custody and administration across its various banking segments. The bank’s leadership appears optimistic about the evolving landscape for digital assets, positioning itself to remain a key player in this burgeoning sector.
