US Bank Allows Bitcoin Custody Service for Institutional Customers as Demand Rises

US Bank Allows Bitcoin Custody Service for Institutional Customers as Demand Rises

US Bank – the fifth-largest retail bank in the United States – is launching a crypto custody service available to fund managers as more institutions struggle to meet customer demand for cryptocurrencies.

Potential space for several of coins

The news first reported from CNBC, announced that the US Bank has partnered with New York Digital Investment Group (NYDIG) to provide crypto services for Bitcoin, Litecoin and Bitcoin Cash. Support for other cryptocurrencies such as Ether (Ethereum) will be introduced in the near future.

The new initiative comes a year after the Office of the Comptroller of the Currency (OCC) - an independent office of the US Treasury Department - published a paper that Permits National banks offer custody of crypto assets.

Gunjan Kedia, an executive in the U.S. bank's wealth management division, surveyed the company's largest clients about their interest in cryptocurrencies. Their results showed a growing interest in digital asset services.

Additionally, customers wanted the bank to “act quickly” as other financial institutions already offer crypto services such as custodial and Bitcoin trading funds. Kedia also found that several customers already have positions in Bitcoin and other cryptocurrencies.

"Our clients are taking cryptocurrency's potential as a diversified asset class very seriously. I don't think there's a single asset manager who isn't thinking about it right now." – Kedia told CNBC in an interview

Institutional client 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, as the Securities and Exchange Commission (SEC) has yet to approve a Bitcoin ETF. Demand has been so great that Kedia added that some clients will want to sign custody contracts when the SEC finally approves a crypto ETF.

The boom in digital assets and blockchain technology in the traditional financial system has had its critics. Nevertheless, most institutional investors have recognized its potential use cases for their companies. This is the case with Arab Bank Switzerland, which recently activatedits customers to store, stake and trade XTZ, Tezos' native utility token.

Financial giant Bank of America was one of those institutions that recognized the potential of cryptocurrencies. HowCryptoPotato reported, the multinational recently released a report titled“Digital Assets Primer: Just the First Inning”outlining that digital assets and the decentralized financial space have grown to the point where they “too big to ignore.“

Featured image courtesy of USBank

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