Originally published on: December 05, 2024
In a groundbreaking move, Anchorage Digital has become the first federally chartered bank in the United States to offer support for liquid Ether (ETH) staking. This exciting announcement was made on December 5th, marking a significant milestone in the world of cryptocurrency banking.
The cryptocurrency bank has integrated support for Liquid Collective’s Liquid Staked ETH (LsETH), a liquid staking token (LST) that represents ETH staked on the Ethereum blockchain. Anchorage Digital is paving the way for US institutions, including venture capital firms, wealth managers, and blockchain protocols, to engage in liquid staking directly from their Anchorage Digital accounts.
By enabling participation in liquid staking, Anchorage Digital Bank NA has become the first Options Clearing Corporation-chartered, US-regulated bank to offer this service. This move opens up new opportunities for institutional staking solutions, particularly as exchange-traded fund (ETF) sponsors anticipate potential approval of staking in US ETH ETFs.
According to StakingRewards.com, stakers on Ethereum can earn approximately 3.5% annual percentage returns in ETH. This represents a compelling opportunity for investors seeking to capitalize on the growing trend of staking as a means of earning passive income in the crypto space.
Liquid Collective, the pioneer in minting LSTs for institutions, places a strong emphasis on regulatory compliance and cybersecurity. Through its LST protocol, which includes mandatory Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, Liquid Collective ensures a secure and transparent staking experience for its users.
With over $70 billion in total value locked (TVL), LSTs have gained significant traction in the DeFi ecosystem. Leading the pack is Lido, with nearly $40 billion in TVL, followed by Liquid Collective with approximately $430 million in TVL, as reported by DefiLlama.
As the demand for institutional staking solutions continues to rise, Anchorage Digital’s foray into liquid Ether staking sets a new standard for digital asset custodians in the US market. With established players like Fireblocks, Coinbase Custody Trust, and Fidelity Digital Asset Services, the landscape of digital asset custody services is evolving to meet the needs of institutional investors seeking exposure to cryptocurrency assets.
In a fast-paced industry where innovation is key, Anchorage Digital’s support for liquid Ether staking heralds a new era of opportunities for investors looking to diversify their portfolios and harness the potential of staking rewards in the ever-expanding world of decentralized finance.
