Key takeaways:
- One of the largest financial institutions in the United States, U.S. Bank has launched a cryptocurrency custodial service for its corporate clients
- The newly launched service supports Bitcoin, Bitcoin Cash and Litecoin, with support for Ethereum and other tokens coming in the future
- Over the course of the year, institutional adoption has grown immensely
One of the biggest financial institutions in the United States, U.S. Bank has started offering cryptocurrency custody services for Bitcoin, Bitcoin Cash, and Litecoin. U.S. Bank joins the likes of JPMorgan and Wells Fargo, which have recently expanded their repertoire of products and services to include crypto offerings.
Support for Ethereum and other coins is in the pipeline
U.S. Bank has first announced its plans to help institutional investors storing private keys to their crypto assets back in April. The newly launched service came to fruition in large part due to the collaboration between the bank and a sub-custodian New York Digital Investment Group (NYDIG), which specializes in providing expertise in building sophisticated asset management products. The bank shared the news on Twitter.
When talking to CNBC, vice-chair of the bank’s wealth management and investment services division, Gunjan Kedia, stated that the fifth-largest bank is working on providing support for Ethereum and other digital assets in the future.
A growing interest in crypto from the bank’s corporate clientele has been the main reason for the release of the new product. Kedia explains:
“Our clients are getting very serious about the potential of cryptocurrency as a diversified asset class. I don’t believe there’s a single asset manager that isn’t thinking about it right now.”
2021 will be remembered as the pivotal year for institutional adoption
Over the course of this year, numerous institutions have started to fully embrace blockchain technology and made long-term commitments to the industry. El Salvador adopting Bitcoin as legal tender was certainly the headline of the year in this regard, however, countries like Brazil and Ukraine have also made considerable progress towards integrating crypto into their economies.
The trend is especially clear when looking at the recent report from Chainalysis, which provides insights into the rapidly changing cryptocurrency landscape. Since June ‘20, Europe has grown to become the largest crypto economy in the world, with $1 trillion worth of transactions. The growth has been mostly driven by increased institutional adoption, since institutional-sized crypto transactions now account for roughly 70% of all transactional volume on the Old Continent.
Payment processing giants have also deepened their ties to the crypto ecosystem. PayPal has started integrating crypto services in October of last year, and has decided to expand its offering to residents outside of US this year, with the launch of crypto services to UK-based customers. Mastercard has committed to start supporting digital assets directly on its network and bought cybersecurity startup CipherTrace to increase the payment platform’s security and prevent fraudulent cryptocurrency activity. At the same time, Visa is working on making its network interoperable between various blockchains, to facilitate payments between tokens issued on different blockchains.
As of August 26, institutional investors have had 1.47M Bitcoin in possession, worth roughly $80 billion at current market rates.
