MINNEAPOLIS, Sept. 3, 2025 — U.S. Bancorp has officially revived its institutional Bitcoin custody service, signaling renewed confidence in digital asset markets after years of regulatory uncertainty. The relaunch positions the bank alongside major players in the custody space, with a focus on institutional investors and the fast-growing Bitcoin ETF sector.
⏳ Why U.S. Bancorp Paused Crypto Custody in 2022
The custody service was originally launched in 2021 but suspended in 2022 after the U.S. Securities and Exchange Commission issued an accounting standard that made crypto custody prohibitively expensive for banks. With that guidance now withdrawn, U.S. Bancorp is re-entering the market at a time when institutional demand is reaching new highs.
🤝 NYDIG’s Role as Sub-Custodian
Under the renewed model, U.S. Bancorp will provide the client-facing banking infrastructure while crypto services firm NYDIG acts as the sub-custodian. This partnership combines the regulatory strength of a major U.S. bank with the specialized expertise of a crypto-native firm, offering institutional clients a more secure and scalable solution.
📊 Expanding Into Bitcoin ETF Custody
A key feature of the relaunch is the inclusion of spot Bitcoin ETF custody. Fund managers will now have direct access to a bank-anchored custody option, broadening competition with Coinbase, which currently controls more than 80% of ETF custody market share.
🚀 Institutional Demand Driving Banking Adoption
Stephen Philipson, vice chair of U.S. Bank’s wealth, corporate, commercial, and institutional banking division, said the service offers “strength and stability and continuity” for clients navigating the evolving digital asset ecosystem. The move underscores how traditional banks are accelerating digital asset adoption as ETF inflows reshape the market.
📌 Key Takeaways
- U.S. Bancorp has relaunched institutional Bitcoin custody after a three-year pause.
- NYDIG will serve as sub-custodian, handling the underlying Bitcoin assets.
- The service now includes ETF custody, challenging Coinbase’s market dominance.
- Regulatory clarity and institutional demand are fueling renewed banking interest in crypto.
❓ Frequently Asked Questions (FAQ)
Q: Why did U.S. Bancorp suspend its Bitcoin custody service in 2022?
A: The suspension followed an SEC accounting standard that made it costly for banks to hold crypto on balance sheets. With that guidance now rescinded, the bank has reopened the service.
Q: What role does NYDIG play in the custody model?
A: NYDIG functions as the sub-custodian, holding the actual Bitcoin assets, while U.S. Bancorp manages client-facing services, compliance, and reporting.
Q: What is ETF custody and why does it matter?
A: ETF custody refers to the safekeeping of Bitcoin held by exchange-traded funds. With U.S. Bancorp entering the space, fund managers gain an alternative to Coinbase, diversifying risk and boosting institutional confidence.
Q: How does this move impact institutional investors?
A: Institutional investors now have access to a bank-backed custody service with enhanced regulatory safeguards, supporting broader adoption of digital assets in mainstream finance.
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