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US Bank, the fifth-largest commercial bank in the United States, has restarted its cryptocurrency custody business after stepping away for more than four years. The move signals a growing confidence among traditional financial institutions that regulatory headwinds around digital assets are easing.
The bank will now offer custody for Bitcoin as well as support for exchange-traded funds (ETFs) tied to the cryptocurrency. These services are geared toward institutional investment managers, including those operating registered funds and private investment vehicles.
A Comeback Driven by Regulatory Shifts
US Bancorp first entered the crypto custody sector in 2021, supporting Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and other digital assets. But by the following year, operations were paused after the Securities and Exchange Commission introduced Staff Accounting Bulletin No. 121. That rule forced banks to recognize crypto holdings on their balance sheets, making custody services costly and less attractive.
The regulatory environment has since shifted. Under the Trump administration, banking regulators have rolled back oversight programs that were widely seen as barriers to crypto adoption. In August, the Federal Reserve officially ended its supervisory program monitoring banks involved in digital assets. Critics had described the program as a form of “crypto debanking.”
This rollback, combined with clearer rules for Bitcoin ETFs, has created an environment where major banks feel more comfortable expanding their digital asset operations.
Partnership With NYDIG Strengthens Custody Services
To support its relaunch, US Bank has partnered with New York Digital Investment Group (NYDIG), a financial services company specializing in Bitcoin-focused infrastructure. NYDIG will provide technology and operational expertise, while US Bank offers institutional clients secure access within a regulated framework.
Tejas Shah, CEO of NYDIG, said the collaboration highlights the accelerating convergence of traditional finance and digital assets. “This partnership shows that Bitcoin custody is no longer a niche service but a core part of the institutional investment landscape,” Shah explained.
Stephen Philipson, vice chair at US Bank, echoed the sentiment, emphasizing that demand from fund managers has been steadily rising. “Reliable custody and administration for Bitcoin ETFs is central to institutional growth. This restart demonstrates our commitment to meeting that demand,” he said.
Rising Competition in the Custody Market
US Bank’s move puts it in direct competition with other major players such as BNY Mellon and State Street, both of which have been steadily expanding their digital asset custody services. Analysts expect the renewed entry of large banks into the sector to intensify competition, particularly as Bitcoin ETFs attract billions in inflows from institutional investors.
The timing may prove significant. In recent months, Bitcoin ETFs have seen record inflows, often consuming more Bitcoin than miners can produce. This supply squeeze, coupled with renewed participation from U.S. banks, could strengthen Bitcoin’s position in the financial system.
Institutional Demand Shapes Next Phase of Adoption
While retail investors drove much of Bitcoin’s earlier bull cycles, this stage of growth is being defined by institutions. With ETF products, treasury allocations, and custody solutions expanding, the role of banks like US Bank is becoming central to bridging traditional finance with blockchain-based assets.
For businesses and fund managers, custody services offer the assurance of security, regulatory oversight, and operational efficiency—three factors that have historically slowed adoption.
With its renewed push, US Bank is signaling that digital assets are now a core part of its long-term strategy. Whether this accelerates mainstream adoption will depend on how quickly other banks follow and how regulators continue to shape the rules of engagement.
