Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
US Bancorp has resumed its digital asset custody services for institutional clients, a strategic reentry made possible by the rollback of a Trump-era Securities and Exchange Commission (SEC) rule. This regulatory shift eliminated a requirement for banks to hold capital on their balance sheets specifically for crypto-related activities, paving the way for the Minneapolis-based bank to reactivate its offerings in the institutional crypto market.
Regulatory Landscape Shifts
The decision to restart these services follows a significant change in federal guidance, particularly from the Office of the Comptroller of Currency (OCC), which is providing traditional banks with more operational flexibility in the digital asset space. This regulatory environment under President Donald Trump’s administration has been instrumental in allowing banks like US Bancorp to explore and re-engage with cryptocurrency services.
US Bancorp’s Renewed Strategy
“We had the playbook and it’s sort of opening it up and executing it again,” stated Stephen Philipson, head of US Bank’s institutional division. He indicated that the bank intends to scale its services in response to demand and is also exploring the integration of digital assets into other areas, including wealth management and consumer payments.
The fifth-largest commercial bank in the US initially launched its custody service in 2021 through a partnership with fintech firm NYDIG. However, this venture was paused due to previous SEC guidance. With the rule now rescinded, US Bancorp is proceeding with a renewed push into the market.
Initially, US Bancorp will provide custody services exclusively for Bitcoin, targeting registered investment funds and Bitcoin ETF providers. The bank has indicated a potential expansion to include other cryptocurrencies, provided they meet its rigorous internal risk and compliance standards.
Broader Institutional Adoption
While the crypto custody sector has historically been dominated by crypto-native firms such as Coinbase, BitGo, and Anchorage Digital, the evolving regulatory landscape is increasingly encouraging traditional financial institutions to enter this space. This trend suggests a growing mainstream acceptance and integration of digital assets within the established financial system.
This movement is not isolated to US Bancorp. In July, Germany’s largest bank, Deutsche Bank, announced its intention to offer cryptocurrency storage for clients, including Bitcoin, beginning next year. Similarly, reports in August indicated that Citigroup was considering offering cryptocurrency custody and payment services, aiming to capitalize on a market bolstered by Trump-era regulatory approvals and pro-industry legislation.
US Bancorp’s re-entry into digital asset custody underscores the significant impact of regulatory changes on traditional finance’s engagement with the cryptocurrency market. This move, alongside similar initiatives from other major banks, highlights a growing trend of institutional adoption, driven by evolving guidelines and increasing demand for secure crypto services.
