Anchorage Digital has set a notable precedent by becoming the pioneer among U.S. federally chartered banks to facilitate liquid Ether staking. On December 5, the cryptocurrency bank revealed its support for Liquid Collective's Liquid Staked ETH (LsETH), a liquid staking token (LST) that signifies staked ETH on the Ethereum blockchain.
The bank aims to serve U.S. institutions, including venture capital firms, wealth managers, and blockchain protocols, directly via their Anchorage Digital accounts. With this integration, Anchorage Digital Bank NA distinguishes itself as the inaugural Options Clearing Corporation-chartered, U.S.-regulated bank enabling participation in liquid staking.
The demand for institutional staking solutions is intensifying as exchange-traded fund (ETF) sponsors look forward to the potential endorsement of staking within U.S. ETH ETFs. On December 2, Bernstein Research speculated that staking yields might soon become a feature of U.S. ETH ETFs.
They suggest that under a hypothetical Trump 2.0, crypto-friendly Securities and Exchange Commission, ETH staking yields are likely to receive approval.
Staking involves securing ETH as collateral with a network validator on Ethereum. While stakers earn ETH payouts from network fees and rewards, they face the risk of "slashing," a penalty that results in loss of ETH collateral for validator misconduct. As of December 5, stakers on Ethereum can earn about 3.5% annual percentage returns (APR) in ETH, according to StakingRewards.com.
The U.S. is witnessing a surge in regulated digital asset custodians, with Fireblocks, Coinbase Custody Trust, and Fidelity Digital Asset Services leading the charge. In September, Anchorage Digital Bank and BitGo were incorporated as custodians by asset manager 21Shares for its spot cryptocurrency ETFs.
Liquid Collective, a specialist in minting LSTs for institutional use, emphasizes regulatory compliance and cybersecurity. Its protocol mandates Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, deploying institutional node operators such as Coinbase and Figment. As reported by DefiLlama, LSTs command a total value locked (TVL) exceeding $70 billion. Among them, Lido is the most prominent, holding nearly $40 billion in TVL. In stark contrast, Liquid Collective maintains a TVL of approximately $430 million.