Crypto custody services coming to U.S. Bank thanks to NYDIG
U.S. Bank has confirmed it’s introducing custody services that support private funds holding Bitcoin, Litecoin and Bitcoin Cash
U.S. Bank's clients from the Cayman Islands and the United States will now be able to enjoy new crypto custodial services. This follows a Tuesday announcement that revealed the bank's partnership with New York Digital Investment Group (NYDIG) as the first sub-custodian to offer the said service. The retail bank added that it still has plans to expand the network of providers.
Through the collaboration with NYDIG, U.S. Bank will support institutional clients with private funds by offering custodial services for Litecoin, Bitcoin and Bitcoin Cash private keys. Speaking on the bank's new plans, Gunjan Kedia, the vice-chair of U.S. Bank Wealth Management and Investment Services, noted that investor interest in the crypto industry has grown over the past year. She also observed that the demand from their fund services clients had surged significantly.
"Our fund and institutional custody clients have accelerated their plans to offer cryptocurrency, and, in response, we made it a priority to accelerate our ability to offer custody services," she said.
The executive, however, noted that the regulatory uncertainty around the crypto environment was not entirely welcoming. Kedia explained this was the rationale behind seeking a partner who would strike a reasonable balance between quality and risk management: NYDIG.
"Integrity and expertise are critical to safeguarding our clients' most valuable assets, so we're thrilled to offer our institutional clients NYDIG's industry-leading Bitcoin expertise, backed by the financial strength of U.S. Bank."
Kedia further asserted that most asset managers were now taking crypto more seriously, especially with the rising client interest. The wealth management and investment services division is a well-established asset manager with more than $8.6 trillion worth of assets under its custody. The latest figures show an additional $282 billion assets under management.
Ranging from the Bank of New York Mellon to financial services company State Street, institutions in the U.S are gradually embracing crypto even with the present regulatory indecision. BNY Mellon announced its crypto strategy back in February, as it rolled out plans to create a Digital Asset Unit for “transferring, safekeeping and issuing digital assets”. On its part, State Street launched a business unit, State Street Digital, to potentially offer crypto custodial services.
Kedia held that even though digital assets were created to cut out intermediaries, the necessity of these very middlemen could not be dismissed. She argued that fund managers need the approval of financial bodies such as U.S Bank to help dispel concerns of their clientele.
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Sam Grant, Khareem Sudlow