The US bank US Bank launched a new custody service for Bitcoin and other cryptocurrencies, to meet the growing demand of its customers and users for digital assets.
US Bank, the fifth largest bank in the United States, reported yesterday that his escrow service for cryptocurrencies as bitcoin is already available for institutional clients. The news was revealed by CNBC, which highlighted the bank’s need to cater to and capitalize on its clients’ interest and demand for crypto assets.
The US bank will offer custody services for Bitcoin (BTC), BitcoinCash (BCH) and Litecoins (LTC) to fund managers. US Bank has partnered with dedicated Bitcoin management firm NYDIG to securely store its institutional clients’ cryptocurrency private keys.
Gunjan Kedia, vice president of the investment services and wealth management division of the US Bank, reported that in the future the entity will add custody for new high-demand cryptocurrencies, such as Ethereum (ETH).
The bank had reported on the launch of this new service in April of this year, highlighting that the custody of bitcoin and other cryptocurrencies would be available to institutional clients who had the contracting service of a sub-depositary for the fund service.
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US Bank recognizes disruptive potential in Bitcoin
US Bank, with over half a trillion dollars in assets under management, is recognizing the importance of cryptocurrencies in the world. In its statement issued in April, the US bank noted that cryptocurrencies are a disruptive technology that is impossible to ignore. By 2015, the price of Bitcoin hovered close to $200 per BTC, while in April it reached an all-time high of $64,800 per unit. The price of Bitcoin has skyrocketed 32,000% in just over 5 years.
The incredible growth of Bitcoin and the entire industry in general prompted the bank to consider integrating new services focused on crypto assets. In addition to bitcoin custody, the US Bank has also been investing in crypto-related companies and blockchain such as Securrency, to gain a foothold within this fast-growing industry.
The bank assured that it would work to promote the innovation of blockchain technology and cryptocurrencies within its spaces and to satisfy the needs of its clients and users.
US Bank Chosen as Custodian for Bitcoin Exchange Traded Fund (ETF) proposed by NYDIG, which is awaiting regulatory approval from the United States Securities and Exchange Commission (SEC).
Traditional banking and cryptocurrencies
The potential of cryptocurrencies within the financial system is driving the entry of a greater number of institutional investors into the crypto space. Cryptocurrencies are seen as a potential diversified investment asset and store of value for the future. Therefore, traditional banks are beginning to accept them as legitimate assets in order to retain and attract more customers. Kedia said that every fund manager today may be thinking about entering the world of cryptocurrencies.
In addition to US Bank, major US banks such as State Street, JPMorgan, Morgan Stanley, NYB Mellon, Signature Bank, and Goldman Sachs are also developing new cryptocurrency products and services; as well as other banking and financial institutions in the world, such as BBVA, Société Générale and SBI Group.
In July, NYDIG announced a alliance with the firm NCR Group to help more than 650 banks accept cryptocurrencies, while the Basel Committee on Banking Supervision began to analyze the possibility of allowing banks to expose themselves to cryptocurrencies on a supervised basis. The Committee, which is the global organization that brings together all banking supervisory authorities, received proposals on banks’ exposure to cryptocurrencies until September 10.
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