Fifth largest bank in the US introduces custody service for Bitcoin and Litecoin

On Tuesday October 5, it appears that the US Bank National Association (aka “US Bank”), the fifth largest commercial bank in the US, has launched a crypto custody service for investments, according to the latest data from the Federal Reserve Manager.

According to a report released today by CNBC, US Bank, a wholly owned subsidiary of US Bankcorp (NYSE: USB), Gunjan Kedia, vice chairman of the bank’s wealth management and securities services division, told CNBC that this new service will “help investment managers, private individuals Store keys for bitcoin, bitcoin cash and litecoin with the support of sub-custodian NYDIG “and that” support for other coins such as Ethereum is expected over time “.

On April 27, the US Bank announced three new crypto-related initiatives via a blog post:

  • “US Bank Global Fund Services will offer a new cryptocurrency custody product for customers with the assignment of a sub-custodian for fund servicing. We are finalizing our selection of sub-custodians and will announce further details in the coming weeks as soon as the internal reviews are completed. “
  • “We recently announced our investment in Securrency – a developer of blockchain-based financial and regulatory technology at the institutional level that is investing the US Bank in its latest funding round.”
  • “US Bank was selected to manage NYDIG’s ETF Bitcoin fund this year, pending regulatory approvals. It builds on the longstanding relationship between the bank and NYDIG for private fund servicing. “

Other major U.S. banks that have already announced their cryptocurrency custody plans include the Bank of New York Mellon, State Street, and Northern Trust.

Kedia also told CNBC that every money manager it knows has “the potential of cryptocurrency as a diversified asset class.”

It appears that following the publication of Interpretative Letter No. 1170 by the Office of the Comptroller of the Currency (the “OCC”) on July 22, 2020, which allowed OCC-regulated banks to hold virtual assets, Kedia “is the largest Asked customers of the company “determine if their interest was genuine” and discovered that “interest in crypto was broad, not limited to niche providers, and that customers wanted the bank to act quickly”.

She told CNBC:

“What we’ve heard consistently is that while not every currency could survive – there may not be room for thousands of coins – the potential of this asset class and the technology behind it has something about it that would make sense for us to stand up for support Therefore.”

She also mentioned that the US Bank was “one of the first institutions to have a live custody product.”

She went on to say that before accepting an investment manager as a client for the crypto custody service, the bank must “trace the origin of the client’s funds” (i.e., follow AML rules) and that this product is only available to “institutional managers” is available with private funds in the USA or on the Cayman Islands, according to the bank. ”

Disclaimer of liability

The views and opinions of the author or the persons mentioned in this article are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading in crypto assets carries the risk of financial loss.

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