The escrow service got designed so that fund managers can store their cryptocurrencies. US Bank decided to launch the initiative due to high customer demand.
The race to provide Bitcoin services to the wealthiest is heating up as more financial institutions lead efforts in the crypto sector.
US Bank, the fifth-largest bank in the United States of America, has become the latest banking institution to join this list after revealing a new digital currency custody service.
CNBC reported on Tuesday that the service would help fund managers store their funds in three cryptocurrencies (Bitcoin, Bitcoin Cash, and Litecoin)
The escrow service is now ready to fund managers and makes it easy to manage digital currency private keys through a partnership with NYDIG. This service got announced exclusively by Gunjan Kedia, vice president of the investment services and wealth management division of US Bank.
More than a century and a headquarter in Minnesota makes US Bank one of the top ten banks in custody with more than $ 8.6 trillion in assets under custody and management, according to Federal Deposit Insurance Corp data reported by CNBC.
US Bank Is Now into Custody of Cryptocurrencies
Although it would allow the custody of three digital assets, there would also be a support to encourage other cryptocurrencies such as Ethereum, according to Kedia. The representative also added that the attack on this asset class is a general trend among institutional investors.
During the interview, the US Bank representative expressed that the initiative started in parallel with a new survey.
The results revealed the growing interest of its clients. The bank carried out the consultation shortly after the Office of the Comptroller of the Currency (OCC) issued a letter in July 2020 authorizing regulated banks to protect digital assets.
The service finally flourished due to high demand from users, who are already waiting for the bank to help them protect their funds. Some investors have strong positions regarding bitcoin.
Other investors are still waiting for custody services to start, according to Kedia. In addition, the representative assured that US Bank is one of the first institutions in the American nation to have a live custody product available.
Bitcoin ETF Could Increase the Demand
While US Bank’s custodial product is available only to institutional managers of private funds based in the United States of America or the Cayman Islands, Kedia noted that the bank expects demand for cryptocurrency-related products to increase shortly.
According to the vice president of the equity division, this interest among clients could increase if the country’s Securities and Exchange Commission (SEC) approves a Bitcoin exchange-traded fund (ETF).
There are many expectations around the approval of the first cryptocurrency ETF in the US, and some experts highlight that the regulator could approve this year.
Kedia said there is a lot of funds to start a massive investment. Some investors want custody contracts to get signed the day the SEC approves an ETF.
By: Jenson Nuñez