Essential Takeaways
- Morgan Stanley has filed with the OCC requesting a national trust bank charter specifically tailored for digital asset custody operations
- The new entity, named “Morgan Stanley Digital Trust,” aims to offer cryptocurrency custody, trading capabilities, swap transactions, staking options, and transfer services
- Citigroup plans to launch institutional bitcoin custody solutions by year-end, integrating them into traditional asset management infrastructure
- Citi’s strategy involves consolidated account structures enabling clients to manage bitcoin alongside securities and cash, with cross-margining capabilities
- Leading banks are expanding cryptocurrency infrastructure to meet growing institutional demand for digital asset solutions
Morgan Stanley has formally filed an application with the Office of the Comptroller of the Currency (OCC) seeking approval for a de novo national trust bank charter. The February 18 submission identifies the proposed institution as “Morgan Stanley Digital Trust, National Association.”
Should the application receive approval, Morgan Stanley would gain authority to deliver digital asset custody solutions to institutional clients. The prospective subsidiary plans to enable cryptocurrency purchasing, selling, swapping, transferring, and staking operations.
National trust bank charters authorize institutions to perform fiduciary functions encompassing asset safeguarding and custodial services. This marks Morgan Stanley’s first trust charter application specifically targeting cryptocurrency activities.
Recent months have witnessed Morgan Stanley’s aggressive push into digital currency markets. The banking giant appointed equity markets specialist Amy Oldenburg in January to lead its cryptocurrency operations and filed applications for spot Bitcoin and Solana ETFs, followed by a staked Ether ETF application.
With roughly $8 trillion in assets under management, the institution is rolling out spot cryptocurrency trading functionality via its E*TRADE division. Leadership is also exploring lending services and yield-generation products tied to digital currencies.
Current employment listings indicate Morgan Stanley is actively seeking candidates for roles including digital assets strategy director and digital assets product lead. The bank is evaluating wallet technology integration across its wealth management ecosystem.
Citigroup’s Bitcoin Custody Initiative
Citigroup has announced plans to deploy institutional bitcoin custody services within the coming months. Nisha Surendran, leading Citi’s digital asset custody initiatives, disclosed these plans at Thursday’s World Strategy Forum.
Surendran described the goal as making “bitcoin bankable.” The bank intends to integrate bitcoin into the same custody, reporting, and tax infrastructure currently used for traditional assets like equities and fixed income securities.
Institutional clients will execute transactions using SWIFT messages, application programming interfaces, or visual interfaces. Citi will handle all clearing and settlement operations internally.
The institution also plans to allow clients to hold bitcoin alongside U.S. Treasury securities, international debt instruments, and tokenized money market products within single custody accounts. This arrangement will support cross-margining between digital currencies and conventional asset categories.
Citi’s market research revealed that institutional investors prefer avoiding direct management of wallets and private keys. They desire bitcoin exposure through familiar banking channels.
Industry-Wide Banking Evolution
Citi operates connections to more than 220 payment and settlement systems globally. The institution has deployed Citi Token Services for treasury operations, a 24/7 blockchain-based network used for internal international fund movements.
JPMorgan has implemented a similar approach with its JPM Coin product. The New York Stock Exchange recently announced plans for a continuous blockchain-driven trading venue for tokenized stocks and ETFs scheduled to debut later in 2025.
In December, the OCC granted conditional clearance to five cryptocurrency-focused national trust bank proposals, including applications from Ripple, BitGo, Fidelity Digital Assets, and Paxos. Stripe-acquired stablecoin infrastructure company Bridge and Crypto.com have since received conditional approvals.
Payoneer also filed a national trust bank charter request this month, potentially enabling it to issue stablecoins and provide cryptocurrency solutions.
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