TL;DR Breakdown
- US Bank begins providing cryto custody service to fund managers.
- Many banks in America are planning to do same.
- High demand for crypto custodial service led US bank to start providing the service.
Top tier American bank, U.S. Bank has announced plans to offer crypto custody service for fund managers.
US bank made the announcement on Tuesday, noting that the service would help investment managers store private keys or cryptos from sub-custodian NYDIG. Although few cryptos are available with the bank now, it says it’d bring more cryptocoins onboard soon.
US banks join crypto frenzy
The announcement by the US bank shows that top banks in America have continued to join the crypto frenzy and see crypto as legitimate assets. Other leading banks in the country like Bank of New York Mellon, State Street and Northern Trust have all announced plans to begin providing crypto custody services for clients.
However, banks in the US began charging towards crypto custody services after the Office of the Comptroller of the Currency (OCC) released a letter approving banks in the country to provide crypto custody services back in July 2020.
Crypto custody services were only provided by exchanges like Coinbase, Gemini, Kraken in America before the approval.
Why US bank wants to venture in crypto custody service
The bank vice chairman of wealth management and investment, Gunjan Kedia, said in an interview that the bank surveyed clients to see if their interest was genuine after crypto custody service was made legal for banks last year.
“What we were hearing across the board is that while every currency might not survive – there may not be room for thousands of coins— there’s something about the potential of this asset class and the underlying technology that would be prudent for us to stand up support for it,” she said.
Some investment clients already have positions in bitcoin, while others are waiting for custody services to begin, she said. US Bank is one of the first institutions to have a live custody product available.
As it is, US bank is only serving institutional managers with private funds in the U.S. or Cayman Islands, according to the bank.
