Bitcoin News Today: Banks Reclaim Crypto Custody as Regulators Clear the Path

U.S. Bancorp has resumed offering bitcoin custody services for institutional investment managers, marking a significant development in the traditional banking sector’s re-engagement with digital assets. This move comes in the wake of regulatory changes under the Trump administration, which have prompted a broader reevaluation of cryptocurrency services among financial institutions. The custody service, originally announced in 2021, has now been expanded to include bitcoin exchange-traded funds (ETFs), reflecting the growing demand for such products and the evolving landscape of digital asset management.

The services are tailored for institutional investment managers with registered or private funds seeking secure solutions for bitcoin custody. U.S. Bank has partnered with NYDIG, a firm specializing in bitcoin financial services and infrastructure, as the sub-custodian. NYDIG will manage the underlying assets, while U.S. Bank will serve as the client-facing intermediary. This structure allows U.S. Bank to offer a comprehensive custody solution to clients, leveraging NYDIG’s expertise in digital asset infrastructure [1].

The decision to restart the custody service follows a regulatory shift that has significantly altered the environment for banks holding digital assets. In early 2022, the U.S. Securities and Exchange Commission issued an accounting bulletin that imposed high capital requirements on banks for holding crypto tokens on behalf of clients. This guidance was repealed earlier this year, clearing the path for banks to resume or expand their crypto-related offerings [1]. The regulatory clarity has encouraged banks to explore a range of digital asset services, including custody, which is now becoming a key component of their institutional offerings.

The resurgence of interest in crypto custody services is also influenced by the growing popularity of spot bitcoin ETFs. These products, which track the price of bitcoin directly, have attracted significant investor interest, particularly as bitcoin’s price has surged this year. U.S. Bank’s expansion of its custody offering to include these ETFs positions it to serve a broader set of institutional clients who are looking for secure and compliant ways to manage their crypto assets [1].

Coinbase, the leading crypto exchange, currently dominates the custody market for spot bitcoin ETFs, with reports indicating that it serves as the custodian for over 80% of such ETF issuers. The entry of traditional banks like U.S. Bank into this market signals a shift in the industry’s approach to custody, with institutions increasingly seeking the stability and regulatory oversight associated with established financial firms [1].

U.S. Bank’s decision also reflects broader regulatory developments under the Trump administration, which has taken a more pro-crypto stance. The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission have issued joint guidance encouraging registered trading platforms to facilitate the trading of certain spot crypto asset products. This move is part of a larger effort to position the U.S. as a global leader in the cryptocurrency industry [4].

The shift in regulatory tone has not only benefited banks but also created new opportunities for startups and other businesses to explore alternative financial solutions. For example, some U.S. startups have begun adopting crypto payroll systems to mitigate the financial pressures caused by rising tariffs. These systems offer cost efficiency and reduced transaction fees, making them an attractive option for companies looking to optimize their financial strategies [5].

U.S. Bank’s resumption of bitcoin custody services underscores the evolving relationship between traditional financial institutions and the cryptocurrency market. With regulatory clarity and market demand driving innovation, banks are now better positioned to offer comprehensive digital asset solutions that meet the needs of institutional clients. As the industry continues to develop, the role of banks in securing and managing crypto assets is likely to expand further, reflecting the maturation of the digital finance ecosystem.

Source: [1] US Bancorp revives institutional bitcoin custody service (https://finance.yahoo.com/news/us-bancorp-revives-institutional-bitcoin-120523648.html) [2] U.S. Bank Resumes Bitcoin Cryptocurrency Custody Services for Institutional Investment Managers (https://ir.usbank.com/news-events/news/news-details/2025/U-S--Bank-Resumes-Bitcoin-Cryptocurrency-Custody-Services-for-Institutional-Investment-Managers/default.aspx) [4] U.S. SEC, CFTC Combine Forces to Clear Registered Firms Trading of Spot Crypto (https://www.coindesk.com/policy/2025/09/02/u-s-sec-cftc-combine-forces-to-clear-registered-firms-trading-of-spot-crypto) [5] Crypto Payroll: A Response to Tariff Pressures (https://www.onesafe.io/blog/crypto-payroll-integration-tariff-impact)