- U.S. Bancorp is reviving bitcoin custody services
- The superregional bank is partnering with NYDIG
- The restart comes after a three-year pause following regulatory uncertainty
U.S. Bancorp has restarted bitcoin custody services following the demise of Biden-era regulatory guidance that had suggested banks needed to report crypto-related assets as liabilities.
The Minneapolis-based superregional bank announced the revival Wednesday, saying the services are meant for institutional investment managers with registered or private funds who "seek a secure safekeeping solution" for bitcoin. NYDIG, the bitcoin firm with which U.S. Bancorp originally partnered, will act as the bitcoin sub-custodian, while the bank will be the client intermediary.
In the service's latest iteration, U.S. Bancorp has expanded its offering to include bitcoin exchange-traded funds. Doing so means the company will now be able to "provide full-service solutions for managers seeking custody and administration services," Stephen Philipson, vice chair and the head of wealth, corporate, commercial and institutional banking, said in a press release.
U.S. Bancorp's decision to resume bitcoin custody services comes as the Trump administration continues to embrace the U.S. crypto industry.
In July, Congress passed the GENIUS Act, which establishes a regulatory framework for stablecoins. President Donald Trump quickly signed the bill into law, marking a win for crypto enthusiasts and eliciting interest from banks such as Bank of America and Citigroup in offering their own stablecoins to facilitate digital payments.
The current environment in Washington, D.C., is a big change from the Biden administration, when regulators openly discouraged investing in digital assets and rejected many applications for new crypto products.
U.S. Bancorp, the parent of U.S. Bank, launched its bitcoin custody services in 2021 in response to clients' growing demand for cryptocurrency-related offerings. Less than a year later, it stopped offering those services following the release of guidance by the Securities and Exchange Commission, which suggested banks and other entities needed to include cryptocurrencies held in custody as on-balance sheet liabilities.
Doing so would have increased capital-related changes at U.S. Bancorp, which would have reduced the "profit viability" of the offerings, a U.S. Bancorp spokesperson said Wednesday in an email.
The SEC guidance was repealed earlier this year, shortly after Trump took office.
U.S. Bancorp has been ahead of many other banks in exploring digital assets, but it is still evaluating the range of possible crypto-related services it could offer.
In July, just prior to the final passage of the GENIUS Act, U.S. Bancorp CEO Gunjan Kedia said the company had been focusing on how to incorporate stablecoins into its large payments business.
Read more about U.S. Bancorp here: https://www.americanbanker.com/organization/us-bancorp
U.S. Bancorp is "quite ready to pilot" its own stablecoin, Kedia told analysts during a call to discuss second-quarter earnings. Still, such a product isn't likely to be "material" to the payments business anytime soon, she noted.
"There are a lot of things to be yet sorted out, both from a technology standpoint and the market structure," Kedia said. "So I would just say at this point, we are quite ready to participate in it, quite ready to engage in the industry discussions around stablecoin, but not anticipating immediate revenue impact to any of our businesses."
U.S. Bancorp, which has about $686 billion of assets, has more than $11.7 trillion in assets under custody and administration in its wealth, corporate, commercial and institutional banking segment.
