tl;dr
U.S. Bank has resumed cryptocurrency custody services after a multiyear hiatus, offering Bitcoin custody and support for Bitcoin-based ETFs. This move follows the SEC's rescission of a rule that had previously blocked banks from holding digital assets. The bank partnered with NYDIG to provide the ...
U.S. Bank has made a bold return to the crypto scene, reigniting its custody operations after a multiyear hiatus. The move comes as regulatory clouds over digital assets begin to lift, signaling a potential shift in the financial industry’s approach to cryptocurrencies. For institutional investors, this development is a welcome sign—U.S. Bank is now offering Bitcoin custody services, including support for Bitcoin-based exchange-traded funds (ETFs), to investment managers overseeing registered or private funds.
The bank’s journey with crypto custody has been anything but linear. In 2021, U.S. Bank proudly positioned itself as an early adopter, promising custody for Bitcoin, Litecoin, Bitcoin Cash, Ethereum, and other altcoins. But by 2022, that promise was put on hold. The Securities and Exchange Commission’s (SEC) SAB No. 121 had effectively blocked banks from holding digital assets, creating a regulatory quagmire. Fast-forward to January 2024, when the SEC rescinded the rule, and the door reopened.
“We’re proud that we were one of the first banks to offer cryptocurrency custody in 2021, and we’re excited to resume the service this year,” said Stephen Philipson, vice chair of U.S. Bank’s wealth and institutional banking division. His enthusiasm underscores a broader industry trend: as regulations stabilize, traditional banks are cautiously but increasingly reengaging with crypto.
U.S. Bank isn’t going it alone. The bank has partnered with fintech firm NYDIG to deliver the service, leveraging the startup’s expertise in digital asset management. While Bitcoin is the current focus, the bank emphasized it’s “continuously evaluating coins” based on risk, compliance, and client demand. This approach suggests a measured expansion, rather than a rush into the crypto market.
The timing of U.S. Bank’s return is no accident. The Federal Reserve recently ended a supervisory program that had monitored banks involved in crypto, and the regulatory landscape has grown more accommodating. This shift coincides with the Trump administration’s pro-crypto stance, a move that has emboldened industry players. Philipson noted the bank’s focus on Bitcoin ETFs, a service that aligns with the SEC’s approval of spot Bitcoin ETFs last year—a development that has drawn billions in investor capital.
For now, Coinbase remains the dominant custodian for ETFs, but U.S. Bank’s entry adds competition and diversifies options for fund managers. As the fifth-largest bank in the U.S. by assets, its reentry signals that crypto custody is no longer a niche experiment but a growing part of the financial ecosystem.
The question now is: Will this be the start of a broader banking renaissance in crypto, or a cautious step forward in a still-evolving market? One thing is clear—U.S. Bank’s return is a reminder that even the most traditional institutions are watching the crypto world with renewed interest.