Spot Bitcoin ETFs amassed over $80 billion in assets by mid-2025, signaling robust institutional interest in crypto. US Bancorp's decision to restart its custody services aligns with this surge, driven by favorable regulation changes. The move positions traditional banks deeper into cefi ecosystems.
The Trump Administration's Regulatory Overhaul
The Trump administration rescinded SEC's SAB 121 in early 2025, a rule that mandated banks to record crypto holdings as liabilities. This change removed capital burdens, enabling banks to offer custody without heavy financial strain.
According to Bloomberg reports, the repeal opened doors for institutions like US Bancorp to reengage with digital assets. Analysts note this as a pro-crypto stance, contrasting prior restrictive policies.
OCC guidance from 2020, which limited bank involvement in crypto, also faced rollbacks. These adjustments foster innovation in cefi while maintaining oversight on risks.
US Bancorp's Relaunch Strategy
US Bancorp, the fifth-largest US bank, paused its crypto custody in 2022 due to regulatory hurdles. Now, partnering with NYDIG as sub-custodian, it targets institutional managers and Bitcoin ETFs.
Stephen Philipson, head of US Bank's institutional division, stated that the bank had a ready playbook and is executing it again to meet rising demand. He emphasized exploring digital assets in wealth management.
The service focuses initially on Bitcoin, with potential expansion to compliant cryptocurrencies. This client-facing approach provides stability in an evolving market.
According to Philipson, a bank-owned provider offers comfort through strength and continuity for clients navigating cefi. The relaunch follows a three-year hiatus, capitalizing on clearer regulations.
Broader Trends in Cefi and regulation
Traditional banks like BNY Mellon and Citigroup are entering crypto custody, competing with firms such as Coinbase. This trend reflects eased regulations under Trump, promoting blockchain adoption.
Reports from Cointelegraph indicate US Bancorp's shares rose 1.44% year-to-date, buoyed by these developments. Institutional demand drives the need for secure, regulated custody solutions.
The Genius Act expands OCC powers over stablecoin issuers, ensuring reserves and oversight. Such measures balance innovation with financial stability in cefi.
Crypto firms seek bank charters amid favorable policies, integrating digital assets into mainstream finance. Regulators play a pivotal role in shaping this landscape.
Implications for Investors and the Market
This revival enhances access to crypto for institutions, potentially increasing liquidity and adoption. Investors gain from diversified custody options under stringent bank regulations.
Eased cefi regulations could spur further integrations, like stablecoin studies by banks. Monitoring policy shifts remains key for strategic decisions.
US Bancorp's reboot underscores how regulatory changes catalyze cefi growth. This evolution offers educational insights into blending traditional and digital finance for long-term value.
