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U.S. Bancorp Launches Bitcoin Services For Fund Managers

PUBLISHED ON 2021-10-06 02:05:00 EST Yashasvini

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U.S. Bancorp launched a cryptocurrency custody service for fund managers in the United States and the Cayman Islands.

The country’s fifth-largest retail bank will be catering to institutional investment managers and will initially provide bitcoin-related financial services via NYDIG, which will later support other cryptocurrencies as well.

NYDIG, which will act as sub-custodian, provides bitcoin technology and financial services solutions to banks, insurers, corporations, and institutions.

“NYDIG is excited to partner with U.S. Bank to provide its customers with a custody solution that meets the highest security, compliance, and regulatory standards,” said Robert Gutmann, co-founder, and CEO of NYDIG.

Bitcoin shot up to an all-time high of about $64,000 in April before losing half its value the next month. Despite that, the cryptocurrency has again managed to hit $50,000 on Tuesday after China banned all digital currency transactions last month.

Despite the volatility of digital currency, businesses are expanding their financial capabilities to include cryptocurrencies as a legitimate asset class. 

CNBC reported that Bank of New York Mellon, State Street, and Northern Trust have all announced plans to custody digital assets. Business Insider reported that JPMorgan Chase & Co would allow access to cryptocurrency funds to all its wealth management clients while a Reuters report stated that Citigroup Inc was considering offering bitcoin futures trading for some institutional clients, in August.

Vice-chairperson of U.S. Bank Wealth Management and Investment Services, Gunjan Kedia said, “Investor interest in cryptocurrency and demand from our fund services clients have grown strongly over the last few years. 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.”

Kedia told CNBC that to onboard a manager into the crypto product, U.S. Bank has to trace the origin of the client’s funds in the industry’s standard anti-money laundering and “Know Your Client” (KYC) checks.

Picture Credits: FinTech Futures

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