US Bancorp May Offer Bitcoin Custody for Institutional Funds Following SEC Rule Rollback

• US Bancorp resumes Bitcoin custody for institutional funds

• Service relaunched after SEC capital rule rollback enables banks to hold crypto assets with adjusted capital treatment

• Institutional focus initially on Bitcoin ETFs and registered investment funds; expansion possible based on risk standards

US Bancorp crypto custody relaunch: US Bancorp resumes Bitcoin custody for institutional funds after SEC rule rollback, signaling more banks may offer custody—read implications.

What is US Bancorp’s new digital asset custody offering?

US Bancorp crypto custody is a relaunched institutional custody service that will initially safeguard Bitcoin for registered investment funds and Bitcoin ETF providers. The bank restarted the product after a regulatory rollback that removed prior capital constraints, and it intends to scale the offering as institutional demand grows.

How did the SEC rule rollback enable banks to reenter crypto custody?

The SEC rule rollback changed capital treatment for crypto-related banking activities, reducing balance-sheet restraints that previously paused many bank custody programs. Regulators including the Office of the Comptroller of the Currency have provided clearer guidance, allowing banks like US Bancorp to redeploy custody playbooks developed with fintech partners such as NYDIG.

US Bancorp resumed digital asset custody services for institutional clients following the SEC rule rollback under the Trump administration.

US Bancorp has reentered the crypto custody market by relaunching digital asset custody services aimed at institutional investment managers. The Minneapolis-based bank — the fifth-largest commercial bank in the U.S. — first piloted custody in 2021 with a fintech partner and is now proceeding after regulatory changes.

US Bancorp’s shares are up 1.44% YTD. Source: Google Finance

US Bancorp will initially provide custody services for Bitcoin (BTC), focusing on registered investment funds and Bitcoin ETF providers. The bank may add other cryptocurrencies later if they meet internal risk and compliance standards.

The custody market has been dominated by crypto-native custodians such as Coinbase, BitGo and Anchorage Digital. Traditional banks have been testing their entry: in 2022 BNY Mellon launched a digital custody platform for select institutional clients, including Bitcoin and Ether (ETH) holdings.

Related: US Federal Agencies Outline Key Risks for Banks Eyeing Crypto Custody (plain text, no link)

Why are more banks pursuing crypto custody now?

Regulatory clarity and market demand are driving banks toward custody services. Institutional interest in spot Bitcoin ETFs and fund custody generates revenue and client-retention opportunities. Banks emphasize compliance, insurance models, and governance to meet fiduciary standards.

How might this affect institutional investors and ETF providers?

Institutional investors benefit from expanded custody options that combine banking oversight with crypto-specific security controls. ETF providers gain additional trusted counterparties for custody services, potentially lowering counterparty concentration risk and increasing institutional adoption of Bitcoin products.

Frequently Asked Questions

Will US Bancorp support tokens beyond Bitcoin?

US Bancorp plans to begin with Bitcoin and may expand to other cryptocurrencies that satisfy its risk, compliance, and custody controls. Any expansion will be based on internal standards and regulatory considerations.

Is this driven by a change in federal policy?

Yes. A rollback of a prior SEC capital rule and clearer guidance from federal banking agencies created a more permissive environment for bank-led custody services, enabling institutions like US Bancorp to relaunch offerings.

Key Takeaways

• Relaunch focus: US Bancorp starts with Bitcoin custody for institutional funds.
• Regulatory catalyst: SEC rule rollback and clearer federal guidance unlocked bank participation.
• Market impact: Expanded custody options may accelerate institutional adoption and diversify custodial counterparty risk.

Conclusion

US Bancorp’s crypto custody relaunch signals renewed bank activity in institutional digital asset services. With Bitcoin custody available to registered funds and ETF providers, and regulatory headwinds easing, traditional banks are positioned to expand offerings responsibly. Watch for measured rollouts tied to compliance and client demand; COINOTAG will monitor developments and report updates.