US Bank to Allow Bitcoin Custody Service for Institutional Clients as Demand Skyrockets
US Bank – the fifth-largest retail bank in the United States – is launching a crypto custody service available to fund managers as more institutions race to meet clients’ demands for cryptocurrencies.
Potential Room For Several of Coins
The news, first reported by CNBC, revealed that US Bank partnered with New York Digital Investment Group (NYDIG) to provide crypto services for Bitcoin, Litecoin, and Bitcoin Cash. Support for other cryptocurrencies like Ether (Ethereum) will be rolled out in the near future.
The new initiative comes a year after the Office of the Comptroller of the Currency (OCC) – an independent bureau within the United States Department of Treasury – released a paper that permits national banks to offer custody of crypto assets.
Gunjan Kedia, a senior executive at US Bank’s wealth management division, surveyed the firm’s biggest clients for their interest in cryptocurrencies. Her results showed surging interest in digital asset services.
Additionally, customers wanted the bank to “move quickly” as other financial institutions were already providing crypto services, like custody and Bitcoin trading funds. Kedia also found that several clients already have positions in Bitcoin and other cryptocurrencies.
“Our clients are getting very serious about the potential of cryptocurrency as a diversified asset class. I don’t believe there’s a single asset manager that isn’t thinking about it right now.” – Kedia told CNBC in an interview
Institutional Clients’ 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) is yet to approve a Bitcoin ETF. The demand has been so high that Kedia added that some clients want custody contracts signed if the SEC finally approves a crypto ETF.
The boom for digital assets and blockchain technology in the traditional financial system has had its detractors. Still, most institutional investors have realized their potential use cases for their businesses. Such is the case with Arab Bank Switzerland, which recently enabled its clients to store, stake, and trade XTZ, Tezos’s native utility token.
Financial giant Bank of America has been one of those institutions to realize the potential of cryptocurrencies. As CryptoPotato reported, the multinational recently published a report called “Digital Assets Primer: Only the first inning,” outlining that digital assets and the decentralized finance space have grown to the point of being “too large to ignore.“
Featured Image Courtesy of USBank
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