US Bank Restarts Bitcoin Custody Service After Years-Long Pause

In brief

U.S. Bank, the fifth largest bank in the United States by assets, is offering Bitcoin custody services again.
The service will be for institutional investment managers.
U.S. Bank first announced the service in 2021 but had to pause it.

Financial services giant U.S. Bank has restarted its crypto custody operations after pausing the service for years due to regulatory uncertainty.

The bank said Wednesday that it would offer Bitcoin custody, including support for exchange-traded funds based on the asset, for institutional investment managers with registered or private funds.

U.S. Bank in 2021 said it was offering custody for the leading cryptocurrency as well as Litecoin, Bitcoin Cash, Ethereum and altcoins “over time,” but stopped the service in 2022 after the Securities and Exchange Commission Staff Accounting Bulletin (SAB) No. 121 bill prevented banks from custodying digital assets.

In January, regulators rescinded the bill.

“We’re proud that we were one of the first banks to offer cryptocurrency custody for fund and institutional custody clients in 2021, and we’re excited to resume the service this year,” Stephen Philipson, vice chair, U.S. Bank Wealth, Corporate, Commercial and Institutional Banking, said in a statement.

The bank added that it was working with fintech New York Digital Investment Group, or NYDIG, to offer the service.

U.S. Bank told Decrypt that it was “continuously evaluating coins from a variety of risk factors and will add additional coins” if they meet the bank’s standards around “risk and compliance and client demand.”

The news from U.S. Bank comes after the Federal Reserve in August ended a supervisory program that monitored banks involved in crypto. America’s central bank back in 2023 forced banks involved in crypto and other fintech activities to notify the Fed and follow strict guidelines.

But since President Donald Trump took office in January, regulations around the crypto space have loosened. The Republican campaigned on a ticket to help the industry and personally invested in crypto through a number of digital-asset ventures.

Philipson added that the bank would focus on custodying Bitcoin for exchange-traded funds. “Following greater regulatory clarity, we’ve expanded our offering to include Bitcoin ETFs, which allows us to provide full-service solutions for managers seeking custody and administration services,” he said.

The SEC approved spot Bitcoin ETFs last year and they have been hugely popular with investors. Fund managers issuing the vehicles have mostly used Coinbase, America’s largest crypto exchange, to custody the digital coins.

U.S. Bank is the fifth largest bank in the States by consolidated assets, according to Federal Reserve data.