Key Takeaways
- Morgan Stanley has submitted an application to the OCC for a national trust bank charter dedicated to digital asset custody
- The proposed entity, dubbed “Morgan Stanley Digital Trust,” would facilitate crypto custody, trading, swaps, staking operations, and asset transfers
- Citigroup is preparing to roll out institutional bitcoin custody services before year-end, embedding them within existing asset management infrastructure
- Citi’s vision includes unified account management where bitcoin sits alongside traditional securities and cash with cross-margining features
- The expansion reflects surging institutional appetite for digital assets delivered through established banking channels
Morgan Stanley has formally submitted a request to the Office of the Comptroller of the Currency (OCC) for a de novo national trust bank charter. The OCC received the filing on February 18 under the designation “Morgan Stanley Digital Trust, National Association.”
This charter would grant Morgan Stanley authorization to hold digital assets in custody for its client base. The planned subsidiary aims to facilitate buying and selling, swaps, transfers, and staking services for cryptocurrencies.
A national trust bank charter empowers financial institutions to conduct fiduciary operations, including safeguarding and custodying assets. This represents Morgan Stanley’s inaugural trust charter application specifically targeting the cryptocurrency sector.
The financial giant has been aggressively expanding its digital asset footprint. Last month, the firm appointed equity markets veteran Amy Oldenburg to oversee its nascent crypto division and submitted applications to launch spot Bitcoin and Solana ETFs, subsequently filing for a staked Ether ETF.
With approximately $8 trillion in assets under management, the institution is also introducing spot cryptocurrency trading capabilities through its E*TRADE platform. Additionally, Morgan Stanley is assessing opportunities in lending and yield-generating products connected to digital assets.
Current job postings reveal the bank is aggressively recruiting for positions such as digital assets strategy director and digital assets product lead. The firm is simultaneously investigating wallet technology integration across its wealth management platform.
Citigroup’s Institutional Bitcoin Custody Initiative
Citigroup unveiled intentions to introduce institutional bitcoin custody services within this calendar year. Nisha Surendran, who oversees Citi’s digital asset custody development, presented the strategy at Thursday’s World Strategy Forum.
Surendran articulated the objective as rendering “bitcoin bankable.” The bank aims to incorporate bitcoin into identical custody, reporting, and taxation frameworks currently utilized for conventional assets such as stocks and bonds.
Clients would have the ability to execute transactions through SWIFT messaging, APIs, or graphical user interfaces. Citigroup would manage all clearing and settlement processes behind the scenes.
The financial institution also intends to enable clients to consolidate bitcoin holdings with U.S. Treasuries, international bonds, and tokenized money market funds within a unified safekeeping account. This architecture would permit cross-margining between cryptocurrency and traditional asset classes.
Citi conducted surveys among its institutional clientele and discovered they prefer not to manage wallets and private keys independently. Instead, they seek bitcoin exposure delivered through conventional banking infrastructure.
Industry-Wide Movement Toward Digital Assets
Citigroup maintains connections to over 220 payment and settlement networks worldwide. The bank has deployed Citi Token Services for cash, an always-on blockchain-powered network utilized for fund transfers within its global ecosystem.
JPMorgan has pursued a comparable strategy through its JPM Coin offering. The New York Stock Exchange similarly revealed plans for a round-the-clock blockchain-enabled trading platform for tokenized equities and ETFs launching later this year.
In December, the OCC granted conditional approval to five crypto-focused national trust bank applications, encompassing Ripple, BitGo, Fidelity Digital Assets, and Paxos. Subsequently, stablecoin infrastructure provider Bridge, acquired by Stripe, and Crypto.com have secured conditional approvals.
Payoneer has also submitted a national trust bank charter application this month, potentially positioning it to issue stablecoins and provide cryptocurrency services.
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