U.S. Bancorp joins Fidelity, BNY Mellon in crypto custody race

2025/09/04 00:24

U.S. Bancorp has resumed its Bitcoin custody service after halting the program for more than 3 years. The initiative comes in the wake of the Trump administration’s pro-crypto stance, which has encouraged traditional financial institutions to delve deeper into digital assets.

The U.S. bank revealed that its program is geared toward institutional investment managers with registered or private funds. Per the bank, the Bitcoin custody service will also include BTC exchange-traded funds (ETFs) for the first time.

U.S. Bancorp plans to include crypto ETFs in its Bitcoin custody program

U.S. Bancorp said it will serve as the client-facing intermediary, while the investment management firm, NYDIG, will serve as the sub-custodian of the underlying asset. The program involves an institution safeguarding Bitcoin on behalf of a client. For NYDIG’s CEO, Tejas Shah, the firm aims to bridge the gap between traditional and modern finance through its Bitcoin custody initiative.

The Minnesota-based bank’s interest in revitalizing its cryptocurrency custody services also came under the leadership of President Gunjan Kedia. Kedia said at the Morgan Stanley U.S. Financials Conference in June that there’s a lucrative opportunity for banks in the crypto sector, which sees a staggering 90% of stablecoin transactions.

Philipson added that the financial institution plans to scale the program as the crypto industry grows to include other cryptocurrencies that meet its internal risk and compliance standards. The bank is also exploring ways to include digital assets in other areas like wealth management and consumer payments.

For the U.S. Bancorp’s chief digital officer, Dominic Venturo, the initiative unlocks new opportunities for the firm to deliver innovative solutions to its customers. He also highlighted that the bank will continue to drive progress in digital finance, while delivering what matters for its clients.

The financial institution discarded its Bitcoin custody service in early 2022 after the U.S. Securities and Exchange Commission made it too capital-intensive for lenders to hold digital assets on behalf of clients. The agency’s guidance, Staff Accounting Bulletin No. 121 (SAB)121, was repealed earlier this year after pro-crypto President Donald Trump took office. The SEC issued SAB 122 this year, which eases accounting challenges for financial institutions offering crypto custody services.

A study by Research and Markets revealed that the crypto custody provider market is expected to grow at a CAGR of 12.82% by 2030. The report also highlighted that the crypto custody market will grow from $3.28 billion in 2025 to over $6 billion in 2030. According to the firm, institutional participation and the proliferation of digital asset classes will be the main drivers of growth in Bitcoin custody services.

The research also revealed that U.S. trade policies in 2025 have affected the sourcing of cryptographic modules, hardware wallets, and related infrastructure. The tariffs have caused many providers to reevaluate supply chain strategies.

Banks show interest in offering crypto custody services

The Trump administration has seen a flurry of banks showing interest in providing various crypto custody services to their clients. As previously reported by Cryptopolitan last month, Citigroup has also indicated interest in exploring custody services for virtual currencies that back crypto-related investment products. 

U.S. Bancorp now joins firms with similar services such as BNY Mellon, Fidelity, Coinbase, Anchorage Digital, and more. The Office of the Comptroller of the Currency also issued a letter in May that allowed financial institutions to engage in crypto custody services.

Other financial institutions are also joining the crypto custody space, with Germany’s Deutsche Bank revealing that it plans to launch the program in 2026. The financial institution also plans to partner with the technology unit of Austria-based Bitpanda crypto exchange.

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Medium2025/09/05 12:53
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