A year after a regulatory physique in the US allowed banks to supply crypto services, US Bank will provide institutional clients with crypto custody services.
US Bank – the fifth-largest retail bank in America – is launching a crypto custody service available to fund managers as more institutions race to meet clients’ demands for cryptocurrencies.
Potential Room For Several of Coins
The news, first reported by CNBC, revealed that US Bank partnered with New York Digital Investment Group (NYDIG) to provide crypto services for Bitcoin, Litecoin, and Bitcoin Cash. Support for other cryptocurrencies like Ether (Ethereum) will be rolled out in the near future.
The new initiative comes a year after the Office of the Comptroller of the Currency (OCC) – an independent bureau within the United States Department of Treasury – launched a paper that permits national banks to offer custody of crypto assets.
Gunjan Kedia, a senior executive at US Bank’s wealth administration division, surveyed the firm’s greatest clients for their interest in cryptocurrencies. Her outcomes confirmed surging curiosity in digital asset services.
Additionally, customers wanted the bank to “move quickly” as different financial institutions were already providing crypto providers, like custody and Bitcoin trading funds. Kedia also found that a number of clients have already got positions in Bitcoin and other cryptocurrencies.
“Our clients are getting very severe in regards to the potential of cryptocurrency as a diversified asset class. I don’t consider there’s a single asset supervisor that isn’t thinking about it right now.” – Kedia told CNBC in an interview
Institutional Clients’ Demand for Crypto is Higher Than Ever
The US Bank said crypto custody will be available to institutional managers with private funds in the US or Cayman Islands because the Securities and Exchange Commission (SEC) is yet to approve a Bitcoin ETF. The demand has been so high that Kedia added that some clients want custody contracts signed if the SEC finally approves a crypto ETF.
The boom for digital assets and blockchain technology within the traditional financial system has had its detractors. Still, most institutional investors have realized their potential use cases for their companies. Such is the case with Arab Bank Switzerland, which lately enabled its clients to store, stake, and trade XTZ, Tezos’s native utility token.
Financial giant Bank of America has been one of those institutions to realize the potential of cryptocurrencies. As reported, the multinational recently published a report called “Digital Assets Primer: Only the first inning,” outlining that digital assets and the decentralized finance space have grown to the point of being “too massive to ignore.“