US Bank has launched a new custody service for Bitcoin and other cryptocurrencies to meet the growing demand of its clients and users for digital assets.
US Bank, the fifth largest bank in the United States, reported yesterday that its custody service for cryptocurrencies, Bitcoin is now available for institutional clients. The news was revealed by CNBC, which highlighted the bank's need to meet and capitalize on its clients' interest and demand for cryptoassets.
The US bank will offer custody services for Bitcoin (BTC), Bitcoin Cash (BCH) y Litecoin (LTC) to fund managers. US Bank has partnered with Bitcoin management firm NYDIG to securely store the private keys to its institutional clients’ cryptocurrencies.
Gunjan Kedia, vice president of the investment services and wealth management division of US Bank, reported that in the future the entity will add custody for new high-demand cryptocurrencies, such as Ethereum (ETH).
The bank had announced 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 service of hiring a sub-custodian for the funds 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 released in April, the American bank noted that cryptocurrencies are a disruptive technology that cannot be ignored. By 2015, the price of Bitcoin was hovering around $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, US Bank has also been investing in cryptocurrency-related companies and blockchain as Securrency, to gain a presence within this rapidly growing industry.
The bank said it would work to drive innovation in blockchain technology and cryptocurrencies within its spaces and to meet 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 U.S. Securities and Exchange Commission (SEC).
Traditional banking and cryptocurrencies
The potential of cryptocurrencies within the financial system is driving more institutional investors into the crypto space. Cryptocurrencies are seen as a potential diversified investment asset and a store of value for the future. As such, traditional banks are starting to accept them as legitimate assets in order to retain and attract more customers. Kedia said that it is possible that all fund managers are now 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 are other global banking and financial institutions such as BBVA, Société Générale and SBI Group.
In July, NYDIG announced a alianza with NCR Group to help more than 650 banks accept cryptocurrencies, while the Basel Committee on Banking Supervision began to consider 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.
Continue reading: Deloitte: Banks must prepare for an imminent digital future full of cryptocurrencies
