U.S. Bancorp Restarts Bitcoin Custody After SEC Rollback as ETF Demand Surges | Invesloan.com

U.S. Bancorp, the fifth-largest commercial bank in the United States, has relaunched its institutional Bitcoin custody service after a three-year pause, citing renewed clarity from Washington and rising demand from investors.

The Minneapolis-based lender said the service will initially cover Bitcoin for registered investment funds and spot Bitcoin ETF providers, with plans to expand if conditions allow.

Institutional Bitcoin Storage Market Heats Up as U.S. Bancorp Rejoins Race

The bank first rolled out crypto custody in 2021 through a partnership with fintech firm NYDIG. Those efforts were quickly put on hold when the Securities and Exchange Commission introduced rules requiring banks offering custody to hold equivalent capital on their balance sheets.

The requirement proved too restrictive, pushing the bank to suspend the program. That changed this year when the SEC rescinded the rule shortly after President Donald Trump began his second term, opening the door for large banks to reenter the digital assets space.

“We had the playbook and it’s sort of opening it up and executing it again,” said Stephen Philipson, head of wealth, corporate, commercial, and institutional banking at U.S. Bank.

He added that the bank expects to scale the business more broadly as demand grows, while also exploring possible applications of crypto and stablecoins across wealth management, payments, and consumer banking.

The relaunch places U.S. Bancorp among a growing list of major financial institutions reactivating or expanding digital custody services.

Bank of New York Mellon, the country’s oldest bank, introduced a custody platform in 2022 to safeguard Bitcoin and Ether for select institutional clients.

Fidelity Investments also offers custody services, while crypto-native firms such as Coinbase, BitGo, and Anchorage Digital remain major players. Anchorage continues to stand out as the only federally chartered digital asset bank.

Fresh regulatory guidance from the Office of the Comptroller of the Currency in March further encouraged banks to participate in digital asset activities, stating that banks no longer need to seek prior approval to offer custody.

Industry observers expect the change to accelerate adoption among mainstream banks, providing institutional investors with more familiar and regulated options for safeguarding assets.

U.S. Bancorp said it will consider expanding custody services beyond Bitcoin, but only for assets that meet its risk and compliance standards. For now, the decision to restart operations shows a renewed willingness by traditional finance to compete with specialized crypto custodians.

The timing also coincides with heightened activity in spot Bitcoin ETFs. Since their approval earlier this year, the products have attracted billions of dollars in inflows, driving institutional demand for secure storage solutions.

Custody is viewed as a key piece of infrastructure to support that growth, and U.S. Bancorp is positioning itself to capture part of the market.

Traditional Finance Firms Globally Shift Toward Crypto Integration

Crypto is edging further into mainstream finance as U.S. banks and regulators move toward deeper integration with digital assets.

In recent months, several large lenders have begun exploring crypto services, stablecoin issuance, and custody solutions once considered too risky.

PNC Bank, which manages $421 billion in client assets, became one of the largest U.S. banks to launch crypto services after announcing a partnership with Coinbase’s Crypto-as-a-Service platform.

Customers will soon be able to buy, hold, and sell digital assets directly through PNC. JPMorgan Chase, Citigroup, and Bank of America are also studying stablecoin offerings, while Deutsche Bank has confirmed plans to launch a crypto custody platform in 2026 in partnership with Bitpanda.

German institutions, including DZ Bank and Sparkassen, have indicated similar intentions, showing how traditional finance is rapidly adapting to demand.

The shift is partly driven by regulation. In July, the first federal stablecoin law was signed, providing a framework for banks to explore dollar-pegged tokens.

Stablecoins like USDT and USDC already support a $230 billion market, moving funds faster and cheaper than legacy rails.

Analysts warn that widespread adoption could reduce deposits and payment revenues for banks, but lenders see opportunity in capturing new flows before tech-native competitors dominate.

Trump Pushes Sweeping Crypto Reforms in Second Term

The regulatory environment has become friendlier as well. In August, the SEC and CFTC issued a joint statement clarifying that registered exchanges may facilitate spot crypto trades, a step intended to improve investor protections and encourage development in the U.S.

For everyday users, this means being able to buy and sell crypto directly, similar to stocks, on licensed platforms that follow compliance rules.

This growing institutional interest is unfolding against a broader political backdrop shaped by Donald Trump’s second administration.

Since returning to the office, Trump has positioned himself as a champion of digital assets, in contrast to what he calls the “hostile” stance of his predecessor.

The White House has already pushed through the GENIUS Act, the country’s first stablecoin law, and is lobbying Congress to pass the CLARITY Act, a comprehensive framework for digital assets.

The administration has also introduced a strategic Bitcoin reserve and published a 160-page report outlining plans to support open-source infrastructure and safeguard user privacy.

SEC Chairman Paul Atkins, a Trump appointee, announced “Project Crypto” in July, a sweeping effort to modernize securities rules and bring crypto asset distributions back onshore.

The project includes clearer categories for tokens, new disclosure standards, and safe harbors for coin offerings and airdrops, steps intended to make it easier for companies to include U.S. investors.

At the same time, tensions with banks remain. In August, a coalition of crypto firms, including Gemini and Robinhood, urged Trump to block new “account access” fees proposed by lenders, arguing such charges would cripple innovation.

Banks countered that the industry is asking for free services while profiting from user data.

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