US bank dives into Bitcoin with crypto custody offer
Crypto’s continued growth has seen an influx of institutional investors into the space. Most explore the unregulated asset class due to constant demand from institutions.
In a recent turn of events, traditional banking institutions have also publicly announced their intention to provide crypto services to their high-value customers. The latest is America’s fifth largest bank, US Bancorp.
US bank joins the crypto train
US Bank, a subsidiary of the holding company US Bancorp, has announced that it will launch a new custody product for managing cryptocurrencies, reports American Banker. The fifth largest U.S. bank with more than $ 554 billion in assets under management (AUM) said it would partner with an anonymous sub-custodian.
He also said he was asked to administer NYDIG’s upcoming Bitcoin Exchange Traded Fund (ETF) if the Securities and Exchange Commission (SEC) ultimately approves the proposal. The bank said it was possible due to the long-standing relationship with the financial services company.
The U.S. bank said its decision to offer crypto custodial services was driven by growing demand from its clients on notable pension funds and insurance companies seeking exposure to volatile assets. According to these clients, crypto is an asset class they would like to own a share of due to its meteoric rise over the past twelve years.
US Bank has worked behind the scenes and recently led an investment round for institutional cryptocurrency infrastructure firm Securrency. The deal, which also had other bank notables like State Street and WisdomTree Investments, saw $ 30 million pumped into the Securrency platform.
The Minnesota-based US bank said it was exploring the crypto space as early as 2015. It also said it had been able to develop the infrastructure required for the custody of cryptocurrencies, such as anti- money laundering (AML); and know-your-customer (KYC) process.
U.S. bank chief strategy officer Christine Waldron noted that things have really gotten better in the crypto space following a directive from the Office of the Comptroller of the Currency (OCC) for national banks to ensure the custody of their crypto clients.
Waldron also noted that the bank couldn’t just keep the first digital Bitcoin asset by saying, “This can’t just be a Bitcoin scenario.”
Legacy Banks Move To Crypto
Institutional investors have been largely reluctant to enter the crypto space following the nascent industry’s hazy regulatory goals.
But in an exceptional year, many legacy banks are gradually looking to take a piece of the crypto pie. Some of the early adopters are Goldman Sachs and Morgan Stanley, who are currently planning to offer crypto-focused wealth funds to their clients.
America’s leading bank Bank of New York (BNY) Mellon is also on the run after announcing it will hold crypto assets for months to come.
Jimmy has been following blockchain development for several years, and he is optimistic about its potential to democratize the financial system. When not immersed in the daily events of the crypto scene, he can watch legal reruns or try to beat his best score in Scrabble.