Minneapolis-based U.S. Bank is taking a big step into the bitcoin business.
In addition to its recent strategic investment in crypto infrastructure firm Securrency, U.S. Bank, part of U.S. Bancorp, the fifth-largest bank in America, said Tuesday it will offer a new cryptocurrency custody product in partnership with an unnamed sub-custodian.
U.S. Bank also announced Tuesday it has been selected to administer NYDIG’s bitcoin exchange-traded fund (ETF) (should it be approved by regulators) – building on the bank’s long-standing private-fund servicing relationship with NYDIG.
Big moves are happening in institutional crypto with news this week of mega-bank JPMorgan following the likes of Morgan Stanley and Goldman Sachs in offering a bitcoin fund to certain clients. While Wall Street’s first movers are getting most of the digital asset attention, U.S. Bank has been quietly and diligently working with blockchain tech since 2015.
The process of selecting a crypto custody provider was greatly accelerated when last year the Office of the Comptroller of Currency (OCC) announced the authorization of cryptocurrency custody for national banks, U.S. Bank strategy chief Christine Waldron told CoinDesk.
Asked if NYDIG, which has reportedly been selected as the custodian for JPMorgan’s upcoming bitcoin fund, was going to serve as the cryptocurrency custodian for U.S. Bank, Waldron said:
“I’m not at liberty to comment. The RFP [request for proposal] is complete, vendor selected, and we’re going to be ready to go here shortly. We just want to make sure we’ve got the proper risk management controls in place to effectively offer these types of products in a safe and secure way.”
In terms of what flavors of crypto U.S. Bank will be servicing, “it can’t just be a bitcoin storyline,” Waldron said.
“I think Morgan Stanley, Goldman and JPMorgan are all focused on what they are going to be providing to their wealth clients,” said Waldron. “What we’re trying to do is create a scalable infrastructure that the investment management community who runs these funds can leverage.”