BlackRock Taps Anchorage Digital as Bitcoin, Ethereum ETF Custodian

Digital asset trust bank Anchorage Digital will safeguard some of the Bitcoin and Ethereum held by BlackRock’s exchange-traded funds, according to two Securities and Exchange Commission filings submitted on Tuesday.

A digital asset trust bank is like a regular bank, but it’s allowed to hold cryptocurrencies on behalf of clients, while Anchorage also specializes in staking, trading, and governance.

The world’s largest asset manager may use several custody accounts at the San Francisco-based bank to maintain funds for its $45 billion iShares Bitcoin Trust ETF, or IBIT, and $1.8 billion iShares Ethereum Trust ETF, or ETHA, BlackRock stated in the filings.

Anchorage’s arrangement with BlackRock underscores the asset manager’s “ongoing risk management approach” and “expanding presence in the digital asset space,” BlackRock stated.

BlackRock had already tapped crypto exchange Coinbase as a custodian for its two crypto funds, alongside several other asset managers that launched new products for the industry’s two largest cryptocurrencies by market value last year.

“We are excited by the opportunity to set a new standard for tailored access to the digital asset class,” Anchorage co-founder and CEO Nathan McCauley said in a statement. “We are helping BlackRock to meet client demand for today and tomorrow.”

So far, Coinbase has been dominant in securing billions of dollars’ worth of digital assets for the Wall Street products. Asset manager VanEck custodies its Bitcoin ETF with crypto exchange Gemini, while financial titan Fidelity self-custodies the BTC backing its Bitcoin fund.

Anchorage entered into a custody arrangement with crypto asset manager 21Shares in September, safeguarding funds for its spot Bitcoin and Ethereum ETFs. 

The digital asset trust bank also began supporting tokens on layer-1 network Aptos, including BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), in December.

BlackRock’s custodial arrangement with Coinbase will not be affected by the firm’s new deal with Anchorage, which received its federal charter from the Office of the Comptroller of the Currency (OCC) in January 2021, the asset manager said.

BlackRock isn’t planning on moving funds to Anchorage from Coinbase, but it can decide how funds are split between the two firms at its “sole discretion,” the asset manager stated.

Edited by Stacy Elliott