The Minneapolis-based bank with over $685 billion in total assets has renewed its Bitcoin custody services for institutions.
Following a 3-year pause, now in a more crypto-appreciative environment, this is possible once more.
Back After a Hiatus
Shared via a press release, U.S. Bank, the primary operating subsidiary of U.S. Bancorp, announced yesterday that it will resume the service that was initially launched in 2021, but will limit it to its Global Fund Services clients who have applied to the early access initiative.
As originally intended, it will remain limited to institutional investment managers with their own funds or private entities that require a safe way to store Bitcoin. The sub-custodian of choice will be the same as it was four years ago – NYDIG, a BTC firm that is focused on facilities and monetary services.
The entity’s chair of Wealth, Corporate, Commercial, and Institutional Banking shared a few words on the announcement:
“We’re proud to have been one of the first banks to offer cryptocurrency custody for fund and institutional clients back in 2021, and we’re excited to resume this service this year.
Following greater regulatory clarity, we’ve expanded our offering to include bitcoin ETFs, which allows us to provide full-service solutions for managers seeking custody and administration services.”
What Caused The Pause?
About a year after the bank initially launched the service, the Securities and Exchange Commission (SEC) issued its staff accounting bulletin (SAB) 121. It outlined that banks had to treat held crypto assets as on‑balance‑sheet liabilities, raising capital requirements and making custody operations impractical.
The document also cites technical, legal, and regulatory risks associated with cryptocurrencies, as watchdogs were stricter in the Biden era during 2022. Specifically, this involved determining how the asset class would be stored, the procedures for court proceedings related to crypto, and whether these assets would be compliant at the time.
“These risks can have a significant impact on the entity’s (user) operations and financial condition.
The staff believes that the recognition, measurement, and disclosure guidance in this SAB will enhance the information received by investors and other users of financial statements about these risks, thereby assisting them in making investment and other capital allocation decisions.”
There have been numerous changes since then, including laws, regulations, and personnel changes, notably the appointment of crypto-friendly President Donald Trump, which have all played a part in easing the hurdles that Bitcoin and the rest of the crypto world had to go through before becoming more widely accepted.
In the wake of all of the reforms, the SAB 121 was rescinded, allowing institutions to hold crypto on their balance sheets and be less fearful of regulator scrutiny. However, they would still have to advise of any risks associated with holding cryptocurrencies as per the new SAB 122 policy.
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