U.S. Bank Revives Bitcoin Custody for Institutions

U.S. Bank has reintroduced its bitcoin custody service for institutional investment managers, once again partnering with NYDIG as sub-custodian, reports BankingDive.

The bank initially launched the service in 2021 but suspended it after the SEC issued Staff Accounting Bulletin 121, which increased the capital burden for banks holding clients’ crypto. With the bulletin rescinded earlier this year—alongside new OCC guidance—U.S. Bank has resumed operations, citing “enhanced regulatory clarity,” according to Laura Cote, head of global fund services product.

Cote explained that relaunching the service required only modest adjustments, particularly since spot bitcoin ETFs, approved in early 2024, have since become a major driver of institutional adoption. U.S. Bank already services 33 bitcoin-related funds administratively, in addition to 15 digital asset strategy funds, and now provides custody as demand from institutional managers grows.

Spot bitcoin ETFs currently hold over $144 billion worth of bitcoin, representing 6.16% of the total supply—a shift underscoring Bitcoin’s institutionalization. U.S. Bank, which services 24% of all U.S.-listed ETFs, sees this as a natural expansion of its role. NYDIG will again provide custody on behalf of U.S. Bank’s clients. “Together, we can bridge the gap between traditional finance and the modern economy by facilitating access to bitcoin as sound money, delivered with the security expected from regulated institutions,” said NYDIG CEO Tejas Shah.