Diversification of cryptocurrency custodians for BlackRock now includes Anchorage Digital.
In a significant shift for the cryptocurrency industry, Anchorage Digital has made history as the first federally chartered digital asset bank in the United States. The bank, which received its national trust charter from the Office of the Comptroller of the Currency (OCC) towards the end of the previous administration, continues to make waves in the industry.
Before Anchorage Digital's groundbreaking move, there were concerns about the concentration of crypto custody when 11 spot Bitcoin ETFs launched simultaneously last year. Many of these ETFs were using Coinbase for custody services, leading to worries about the centralisation of digital assets.
However, recent developments have seen Anchorage Digital expand its reach. The bank has announced its partnership with BlackRock, one of the world's largest asset managers, to provide custody services for some of the cryptocurrency that backs BlackRock's crypto ETFs. This move marks a significant shift, as until now, Coinbase Custody Trust was the primary crypto custodian for BlackRock's crypto ETFs.
Robert Mitchnick, Head of Digital Assets at BlackRock, has stated that Anchorage Digital meets the standards for high-quality institutional providers. This endorsement underscores the bank's growing reputation in the industry.
The Securities and Exchange Commission's custody rule, SAB 121, has played a role in this shift. The rule prevented the world's largest custody banks from looking after crypto, but startups like Anchorage Digital have far greater experience providing institutional crypto custody due to this rule.
While other digital asset banks may be in the pipeline to receive federal charters, recent documents do not list any new federally chartered digital asset banks beyond Anchorage. Other crypto-related financial institutions have received state-level approvals or no-action letters, but these are not federal charters.
One such example is Wyoming’s Two Ocean Trust, which received state-level clearance for crypto custody. However, these are not on par with a federal charter, such as the one held by Anchorage Digital.
Another notable development is the carve-out that BNY made last year, which allowed the iShares IBIT Bitcoin ETF, the largest crypto ETF with a market capitalization of $44 billion, to bypass SAB 121 before it was rescinded.
As the cryptocurrency industry continues to evolve, Anchorage Digital's federal charter sets a precedent for other digital asset banks looking to enter the space. Keeping an eye on the OCC's official announcements or recent federal filings may provide insights into any new federally chartered digital asset banks that emerge in the future.
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