U.S. Bank has resumed crypto custody services, reopening Bitcoin custody for institutional investment managers and fund sponsors after a multi-year pause. The move restores a service the bank first offered in 2021 and stopped in 2022 amid regulatory uncertainty.
The pause followed the SEC’s Staff Accounting Bulletin No. 121 (SAB 121), which constrained banks’ ability to custody digital assets. With that guidance rescinded this January, U.S. Bank said it is once again able to provide custody services, starting with Bitcoin and with support for spot Bitcoin exchange-traded funds (ETFs).
The bank will work with fintech partner NYDIG to deliver custody and related administrative services. Stephen Philipson, vice chair of U.S. Bank Wealth, Corporate, Commercial and Institutional Banking, said the bank was “proud” to restart the offering and that it will evaluate additional coins “from a variety of risk factors” before adding them.
The announcement comes as federal oversight of banks’ crypto activities has shifted: the Federal Reserve ended a targeted supervisory program for banks involved in crypto last year, and regulators have signalled a more permissive stance toward certain crypto services. Many fund managers currently use custodians such as Coinbase for spot Bitcoin ETFs, but U.S. Bank’s re-entry adds an established traditional-bank option.
For institutional managers, the return of a major bank to custodying Bitcoin may simplify integration with legacy fund structures and offer familiar operational controls. However, custodial availability does not remove market volatility, operational or regulatory risks—asset managers should continue thorough due diligence on custody arrangements, insurance and compliance.
Source: Decrypt. Read the original coverage for full details.