Originally published on: December 05, 2024
Anchorage Digital has achieved a significant milestone by becoming the first federally chartered bank in the United States to offer support for liquid Ether (ETH) staking. This groundbreaking announcement was made on Dec. 5, marking a new era for cryptocurrency banking.
The innovative move by Anchorage Digital includes the addition of support for Liquid Collective’s Liquid Staked ETH (LsETH), which is a liquid staking token (LST) representing ETH staked on the Ethereum blockchain. This integration allows US institutions, such as venture capital firms, wealth managers, and blockchain protocols, to engage directly from their Anchorage Digital accounts.
As Anchorage Digital stated, this initiative makes them the first Options Clearing Corporation-chartered, US-regulated bank to facilitate participation in liquid staking. This development opens up new opportunities for institutional investors seeking exposure to staking rewards in the cryptocurrency market.
Institutional staking solutions are gaining momentum as anticipation grows for the potential approval of staking in US ETH exchange-traded funds (ETFs). Bernstein Research recently predicted that US ETH ETFs could soon incorporate staking yield, especially under a more crypto-friendly Securities and Exchange Commission.
Liquid Collective, a key player in the staking ecosystem, specializes in minting LSTs for institutions while prioritizing regulatory compliance and cybersecurity. Their protocol includes mandatory Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, along with institutional node operators like Coinbase and Figment.
With LSTs commanding over $70 billion in total value locked (TVL), Liquid Collective’s impact on the staking landscape is undeniable. Popular platforms like Lido, holding nearly $40 billion in TVL, have contributed to the rapid growth of liquid staking.
As the cryptocurrency industry continues to evolve, Anchorage Digital’s foray into liquid Ether staking sets a new standard for institutional involvement in the staking economy. Stay tuned for more updates on this pioneering development in the world of digital assets.