The to-be presented service for investment managers is designed for the storing of private keys for Bitcoin and other cryptocurrencies with additional security. The sub-custodian NYDIG will assist US Bank with this service. Support for coins like Ethereum is expected after the launch of the offering.
The bank's offering is most likely tied to the progressive establishment of institutional players on the cryptocurrency market. While large companies or funds are ready to accept clients who are willing to invest in cryptocurrency markets, custody banks will be able to safeguard digital funds worth trillions of dollars. Major U.S. banks like Bank of New York Mellon, State Street and Northern Trust have already announced plans to custody digital assets.
The bank's vice chair, Gunjan Kedia, stated that their clients are looking forward to diversifying their portfolios with digital assets since they bring more volatility and offer significant returns in a shorter time.
US Bank is currently one of the biggest players in the custody market with $8.6 trillion in assets under custody and administration. After the release of the paper that allows national banks to provide custody for cryptocurrency-related assets, the bank surveyed its largest clients to measure the demand for such an offering.
The presented product is designed exclusively for institutional clients from the U.S. or Caymans. Demand for custody products is expected to rise once the SEC approves a Bitcoin ETF.