U.S. Bank has confirmed that it is introducing custody services that support private funds holding Bitcoin, Litecoin and Bitcoin Cash
U.S. Bank customers in the Cayman Islands and the United States can now take advantage of new crypto custody services. This follows an announcement on Tuesday announcing the bank’s partnership with New York Digital Investment Group (NYDIG) as the first sub-depository bank to offer the said service. The retail bank added that it still has plans to expand the network of providers.
By partnering with NYDIG, U.S. Bank will support institutional clients with private funds by providing custody services for private keys of Litecoin, Bitcoin and Bitcoin Cash. Gunjan Kedia, the vice chair of U.S. Bank Wealth Management and Investment Services, shared that investor interest in the crypto industry has increased over the past year. She also noted that demand from her fund services clients has increased significantly.
“Our fund and institutional custodian clients have accelerated their plans to offer cryptocurrency, and in response, we have made it a priority to accelerate our ability to offer custodian services”, she said.
However, the executive shared that the regulatory uncertainty surrounding the crypto environment was not entirely welcome. Kedia explained that this was the reason for looking for a partner who would strike a reasonable balance between quality and risk management: NYDIG.
“Integrity and expertise are critical to protecting our clients’ most valuable assets, so we are pleased to offer our institutional clients NYDIG’s industry-leading Bitcoin expertise, supported by U.S. Bank’s financial strength.”
Kedia further claimed that most asset managers are now taking crypto more seriously, especially with the rise in customer interest. The Wealth Management and Investment Services department is an established asset manager with more than $8.6 trillion in assets in custody. The latest figures show an additional $282 billion in assets under management.
From Bank of New York Mellon to financial services firm State Street, institutions in the US are gradually turning to crypto despite the current regulatory indecision. BNY Mellon announced its crypto strategy back in February when it announced plans to create a digital assets division for the “Transfer, custody and issuance of digital Assets” imagine. State Street, for its part, has formed a business unit, State Street Digital, to potentially offer crypto custody services.
Kedia took the view that, although digital assets were created to eliminate intermediaries, the need for these intermediaries could not be dismissed. She argued that fund managers need the approval of financial institutions such as the US bank to address their clients’ concerns.