- US Bancorp reenters Bitcoin custody, marking Wall Street’s deeper move into crypto.
- Bitcoin ETFs fuel rising demand as custody shifts from niche role to core finance.
- Control of custody may determine which banks lead the next phase of digital assets.
US Bancorp has returned to the digital asset sector with the relaunch of its custody service. The move reflects a broader shift in how major financial institutions handle Bitcoin. A niche business once led by crypto-native firms is now becoming part of systemic financial infrastructure. Custody has become the entry point for Wall Street’s digital asset ambitions.
The Minneapolis-based bank, the fifth-largest in the United States, will focus initially on Bitcoin custody services for institutional investment funds and ETF issuers. The expansion to other tokens could be considered further down the road, pending risk and compliance reviews. The bank paused its earlier attempt in 2022 after the SEC sent guidance increasing capital costs.
Regulatory Shift Sparks Bitcoin Custody Revival
The rule obligated banks to record digital assets directly on their balance sheets. It made custody too capital-intensive and forced lenders to exit. Earlier this year, the rule was repealed under President Donald Trump’s administration. The rollback reopened the market and cleared the path for traditional lenders to rejoin the race.
Stephen Philipson, who leads US Bancorp’s institutional division, said the relaunch is a matter of execution. He explained that the bank had built the playbook during its first launch in 2021. Demand had grown since then, particularly as institutional products tied to Bitcoin expanded.
The launch of Bitcoin exchange-traded funds in 2024 has shifted the market. Several asset managers have launched spot Bitcoin ETFs, with BlackRock’s iShares Bitcoin Trust emerging as the biggest at over $80 billion. These funds require secure custodians to store their assets. The need for scale and reliability has pulled large banks back into the sector.
Coinbase has so far led the crypto ETF custody space, providing services to over 80% of issuers. But banks see an opportunity to take market share. Custody is a predictable service, grounded in balance sheet strength and compliance. Institutions view it as a natural extension of their existing role.
Bitcoin Custody Becomes Wall Street’s New Financial Backbone
BNY Mellon was the first U.S. bank to enter custody service in 2022. It offered storage for Bitcoin and Ethereum to selected clients. Citigroup is evaluating similar services. In July, Deutsche Bank announced plans to launch its own digital asset custody platform by 2026, in partnership with Austria’s Bitpanda. The market is consolidating quickly.
Bitcoin is no longer limited to crypto-native companies and exchanges. Custody determines who controls access to the asset class. Whoever dominates custody would shape the competitive order of the next phase of financial markets.
Custody platforms are a foundation for wealth management, institutional lending, and consumer payments. Banks see the service as an entry point to broader digital strategies. Once infrastructure is in place, additional services could be layered on top. Bitcoin is the wedge through which those services are being built.
Related: SEC, CFTC Unite to Allow Spot Crypto Trading on U.S. Platforms
US Bancorp’s reentry signals normalization, with custody shifting from speculation to a back-office function increasingly demanded by clients. This shift shows how far Bitcoin has traveled from its early outsider status. As institutions compete to secure billions in ETF assets, the story is less about price and more about infrastructure.
Custody may determine the balance of power in digital finance. The race between banks and crypto-native companies is picking up steam. For now, Bitcoin is still the test case. Custody is set to become a pillar of the financial system, and whoever controls it will determine the structure of Wall Street’s digital future.
