Today, the country’s fifth largest retail bank, the US Bank, is expected to announce that its bitcoin custody services are available to fund managers, CNBC mentioned.
Gunjan Kedia, vice president of wealth management and investment services at the bank, stated that the service will hold the private Bitcoin keys of fund managers through a partnership with NYDIG. CNBC.
Fund managers, US Bank, and NYDIG are likely to participate in a multi-signature Bitcoin private key solution, which requires the signature of the majority of private key holders before Bitcoin can be spent, and is widely understood to be a powerful security tool for institutional buyers.
“Our clients are getting very serious about the potential of cryptocurrency as a diversified asset class,” Kedia said in an interview. “I don’t think there’s a single asset manager who isn’t thinking about that right now.”
After surveying the largest US bank customers to determine their interest in bitcoin, it found that demand was broad, and that customers “wanted the bank to move quickly,” according to CNBC.
“What we have been hearing across the board, is that while every currency may not last — there may not be room for thousands — there is something about the potential of this asset class and the underlying technology that we would be wise to stand up to and show support for,” he said. Kidia.
The US Bank will be among the first institutions to have a direct institutional custody product available. Although at first glance it may seem ironic that the coin was born despite trusted third parties, self-holding Bitcoin is not an option for some institutional investors. A preemptive Bitcoin solution in many cases provides price exposure where there would be nothing otherwise.
The Bitcoin custodian product is currently only available to institutional managers with private funds in the United States or the Cayman Islands, according to the bank. However, the demand for more Bitcoin products, such as the ETF, is on the rise.
“We have a lot of funds hoping to invest in ETFs,” Kedia said. “Some literally want custody contracts signed on the day the SEC approves the ETF.”
The US Bank, with more than $8.6 trillion in assets under management, is just the latest in a string of banks dealing with Bitcoin. This comes after a year of increased demand for Bitcoin by institutional investors. Notably, Bank of New York Mellon, among other traditional conservative financial institutions, has announced plans to hold bitcoin and cryptocurrencies.