U.S. Bancorp's institutional crypto custody business has seen a revival under the crypto-friendly Trump administration, with the bank "researching and observing" its potential role in the stablecoin space, CEO Gunjan Kedia stated.
U.S. Bancorp CEO Gunjan Kedia mentioned at the Morgan Stanley U.S. Financial Conference on Wednesday that the crypto custody service created by her bank in 2021 performed poorly during the Biden administration, but interest in the service has recently rebounded.
"The product didn't really take off at that time because the regulatory environment was very uncertain for large institutional investors," Kedia said. "Now the product is back, and we are fully capable of providing this service."
The U.S. Securities and Exchange Commission (SEC) during the Biden era initiated several legal actions against crypto products, which caused institutional investors to lose interest in crypto-related businesses.
However, President Donald Trump, whose family business is involved in the cryptocurrency space, effectively reversed the SEC's previous enforcement actions related to crypto and promised to halt future regulatory actions against the industry.
Kedia stated that the "larger discussion" currently revolves around using stablecoins for payments, and her company is "researching and observing" this area.
She added that U.S. Bancorp (trading as U.S. Bank, the fifth-largest bank in the U.S.) could create its own stablecoin, and "this is something we can achieve through collaboration; we already have enough pilot projects underway."
Kedia mentioned that her bank could also provide infrastructure for the token, hold its supporting assets, and offer services such as custody, noting that these services "still need to be clarified."
Kedia pointed out that although the headline figures for stablecoin trading volume appear attractive for financial institutions to engage in stablecoins, a significant portion of that volume still occurs within the cryptocurrency space.
"Behind it, 90% of the trading volume is merely cryptocurrency-to-cryptocurrency trading," she added.
She also stated that questions about how to build stablecoin products will begin to be answered by the GENIUS Act, which aims to provide issuers with rules on how to offer tokens. The U.S. Senate advanced the bill in a vote on Wednesday.
"There are still many questions to be resolved before we clarify the role we will play," she said.
Related: Trump's consumer protection reforms could put cryptocurrency users in a bind
Original article: “U.S. Bancorp studying stablecoins, crypto custody sees revival”
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