Bitcoin News Today: Traditional Banks Enter Bitcoin Custody Race as Regulations Shift

U.S. Bancorp has announced the resumption of its cryptocurrency custody services for institutional investment managers, marking a significant step in the broader adoption of digital assets by traditional financial institutions. The bank, which first introduced its bitcoin custody services in 2021 in partnership with NYDIG, has now expanded the offering to include Bitcoin ETFs as part of an early access program for its Global Fund Services clients. The service is intended for institutional clients seeking secure custody solutions for Bitcoin. NYDIG, a vertically integrated financial services firm specializing in Bitcoin-related infrastructure, serves as the primary sub-custodian for the offering [1].

The decision to resume custody services followed regulatory developments that provided greater clarity for banks engaging in digital asset activities. In 2025, the U.S. Securities and Exchange Commission (SEC) rescinded a prior rule that had required banks to hold capital on their balance sheets for cryptocurrency custody services. This change came shortly after President Donald Trump began his second term, signaling a shift in the regulatory landscape for digital assets. Additionally, the Office of the Comptroller of the Currency (OCC) clarified that banks can now participate in digital asset custody and other related activities without requiring prior approval, further encouraging traditional financial institutions to enter the space [2].

U.S. Bank's wealth, corporate, commercial, and institutional banking unit, led by Stephen Philipson, emphasized the bank’s commitment to innovation in digital finance. “We’re proud that we were one of the first banks to offer cryptocurrency custody for fund and institutional custody clients back in 2021, and we’re excited to resume the service this year,” Philipson stated. The expanded offering allows the bank to provide a full-service solution for institutional investment managers seeking custody and administration services, aligning with the growing demand for institutional-grade access to Bitcoin [1].

The digital asset custody market has predominantly been led by crypto-native firms such as Coinbase Global Inc., BitGo Holdings Inc., and Anchorage Digital, the only crypto custodian with a federal trust bank charter. However, with the latest regulatory clarity, traditional banks like U.S. Bank, Bank of New York Mellon Corp., and Fidelity Investments are now competing more directly in the sector. U.S. Bank, which has over $11.7 trillion in assets under custody and administration as of June 30, 2025, aims to leverage its scale and established infrastructure to meet the evolving needs of institutional clients in digital asset management [1].

Dominic Venturo, U.S. Bank’s senior executive vice president and chief digital officer, noted that the bank has been at the forefront of exploring how digital assets can serve its clients. “Further expanding our capabilities unlocks new opportunities to deliver innovative solutions,” Venturo said. The bank has also expressed interest in evaluating additional use cases for crypto and stablecoins across its wealth, payments, and consumer banking divisions, subject to meeting the bank’s risk and compliance standards [2].

The partnership with NYDIG underscores the role of specialized infrastructure providers in supporting institutional-grade custody solutions. Tejas Shah, CEO of NYDIG, highlighted the collaboration as a key step in bridging the gap between traditional finance and the modern economy. “Together, we can facilitate access for Global Fund Services clients to bitcoin as sound money,” Shah said, emphasizing the safety and security expected by regulated financial institutions [1].

U.S. Bank’s move reflects a broader trend among major financial institutions to adapt to the rapidly evolving digital asset landscape. With the recent regulatory developments and growing institutional demand, banks are increasingly positioning themselves to provide secure and compliant custody solutions for Bitcoin and potentially other cryptocurrencies in the future [2].

Source:

[1] 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)

[2] U.S. Bancorp Resumes Crypto Custody as Regulators Clear Path (https://www.bloomberg.com/news/articles/2025-09-03/u-s-bancorp-resumes-crypto-custody-as-regulators-clear-path)