U.S. Bancorp has reactivated its Bitcoin custody service after a hiatus of over three years, signaling a significant shift in how traditional financial institutions are approaching digital assets. This move by one of the largest commercial banks in the United States reflects a broader industry trend, largely influenced by a more accommodating regulatory environment under the Trump administration, and a growing institutional appetite for secure digital asset infrastructure. The re-entry positions U.S. Bancorp to capitalize on the burgeoning demand from institutional investors seeking secure and compliant avenues into the cryptocurrency market.
- The reinstated program specifically targets institutional investment managers overseeing registered or private funds.
- For the first time, the service will encompass Bitcoin exchange-traded funds (ETFs).
- U.S. Bancorp will act as the client-facing intermediary, partnering with NYDIG as the sub-custodian for underlying digital assets.
- Executives articulate a strategic vision for expanding the bank’s presence within the digital asset space, highlighting lucrative opportunities.
- The bank plans to scale the program to include additional cryptocurrencies that meet rigorous internal risk and compliance standards.
- Future explorations include integrating digital assets into other areas such as wealth management and consumer payments.
Regulatory Framework Reshaped
The catalyst for U.S. Bancorp’s re-engagement with digital asset custody services stems directly from a significant overhaul in regulatory guidance. The bank had initially suspended its Bitcoin custody program in early 2022 due to the U.S. Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin No. 121 (SAB 121), which made holding digital assets on behalf of clients highly capital-intensive for lenders. Earlier this year, under the pro-crypto stance of President Donald Trump, SAB 121 was repealed. Subsequently, the SEC issued SAB 122, a new directive designed to alleviate accounting complexities for financial institutions offering crypto custody services, thereby clearing a significant regulatory hurdle for banks like U.S. Bancorp.
Expanding Market and Competition
The decision by U.S. Bancorp aligns with projections for substantial growth in the crypto custody provider market. A study by Research and Markets forecasts a compound annual growth rate (CAGR) of 12.82% by 2030, with the market value expected to rise from $3.28 billion in 2025 to over $6 billion. This expansion is primarily driven by increasing institutional participation and the proliferation of diverse digital asset classes. Moreover, the broader economic landscape, including U.S. trade policies in 2025, has influenced the sourcing of cryptographic modules and hardware wallets, prompting providers to reassess their supply chain strategies.
U.S. Bancorp now joins a growing list of established financial institutions and specialized firms offering similar services, including BNY Mellon, Fidelity, Coinbase, and Anchorage Digital. This competitive landscape indicates a broader acceptance and integration of digital assets into mainstream finance. The Office of the Comptroller of the Currency (OCC) further bolstered this trend in May by issuing a letter explicitly permitting financial institutions to engage in crypto custody services. Beyond the U.S., international players like Germany’s Deutsche Bank are also entering the space, with plans to launch a custody program in 2026, partnering with Austria-based Bitpanda crypto exchange’s technology unit, underscoring the global nature of this financial evolution.
Tyler Matthews, known as “Crypto Cowboy,” is the newest voice at cryptovista360.com. With a solid finance background and a passion for technology, he has navigated the crypto world for over a decade. His writing simplifies complex blockchain trends with dry American humor. When not analyzing markets, he rides motorcycles, seeks great coffee, and crafts clever puns. Join Crypto Cowboy for sharp, down-to-earth crypto insights.