U.S. Bancorp embraces bitcoin once again after Biden-era setback
U.S. Bancorp recently announced the resurrection of its bitcoin custody services after a three-year hiatus due to regulatory uncertainties during the Biden administration. This move marks a significant shift for the Minneapolis-based superregional bank, which is now catering to institutional investment managers looking for a secure way to store their bitcoin assets. By partnering with NYDIG, U.S. Bancorp is able to offer a comprehensive solution that includes bitcoin exchange-traded funds, expanding its services to meet the evolving needs of its clients.
The decision to reintroduce bitcoin custody services comes at a time when the Trump administration is showing a more favorable stance towards the crypto industry. The passage of the GENIUS Act, which establishes a regulatory framework for stablecoins, has paved the way for banks like U.S. Bancorp to explore new opportunities in the digital payments space. With the regulatory environment becoming more supportive of cryptocurrencies, U.S. Bancorp is seizing the opportunity to re-enter the bitcoin custody market and provide innovative solutions to its clients.
In 2021, U.S. Bancorp initially launched its bitcoin custody services in response to increased demand from clients interested in cryptocurrency-related offerings. However, following guidance from the Securities and Exchange Commission that treated cryptocurrencies as on-balance sheet liabilities, the bank paused these services to avoid potential capital-related challenges. With the repeal of this guidance under the new administration, U.S. Bancorp has found the regulatory landscape more conducive to re-establishing its bitcoin custody services.
Despite being ahead of many other banks in the digital assets space, U.S. Bancorp is still evaluating the full spectrum of crypto-related services it can offer. CEO Gunjan Kedia has expressed interest in piloting the bank’s own stablecoin, but acknowledges that there are still technological and market structure considerations to address before any significant revenue impact can be expected. With over $11.7 trillion in assets under custody and administration, U.S. Bancorp is well-positioned to explore new opportunities in the crypto industry while ensuring its offerings align with market demands and regulatory guidelines.
As U.S. Bancorp re-enters the bitcoin custody market, it is set to provide a secure and comprehensive solution for institutional clients seeking to manage their bitcoin assets. By partnering with NYDIG and expanding its services to include bitcoin exchange-traded funds, U.S. Bancorp is demonstrating its commitment to meeting the evolving needs of its clients and capitalizing on the growing demand for cryptocurrency-related services in the financial industry.
