Morgan Stanley and Citigroup Move to Bring Bitcoin and Crypto Into Mainstream Banking

TLDR

• Morgan Stanley applied for a national trust bank charter with the OCC to custody crypto assets for clients
• The subsidiary, “Morgan Stanley Digital Trust,” will support crypto custody, trading, swaps, staking, and transfers
• Citigroup plans to launch institutional bitcoin custody later this year, integrating it with traditional asset frameworks
• Citi wants clients to manage bitcoin alongside securities and cash in a single account with cross-margining capability
• Both banks are expanding crypto infrastructure as client demand grows for digital assets within familiar banking systems

Morgan Stanley has applied for a de novo national trust bank charter with the Office of the Comptroller of the Currency (OCC). The application, received on Feb. 18, was filed under the name “Morgan Stanley Digital Trust, National Association.”

The charter would allow Morgan Stanley to custody digital assets on behalf of clients. The subsidiary plans to support purchases, sales, swaps, transfers, and crypto staking.

A national trust bank charter lets a financial institution handle fiduciary activities like asset safekeeping and custody. This is Morgan Stanley’s first trust charter focused specifically on crypto.

Morgan Stanley has been moving quickly into the digital asset space. In January, it hired equity markets executive Amy Oldenburg to lead its new crypto unit and filed to launch spot Bitcoin and Solana ETFs, followed by a staked Ether ETF filing.

The bank, which oversees roughly $8 trillion in assets, is also rolling out spot crypto trading on the E*TRADE platform. It is evaluating lending and yield products tied to digital assets as well.

Job listings show Morgan Stanley is actively hiring for roles including digital assets strategy director and digital assets product lead. The bank is also exploring wallet technology across its wealth platform.

Citi Plans Institutional Bitcoin Custody

Citigroup announced plans to launch institutional bitcoin custody later this year. Nisha Surendran, who leads Citi’s digital asset custody buildout, outlined the plan at the World Strategy Forum on Thursday.

Clients would be able to instruct transactions via SWIFT, APIs, or user interfaces. Citi would handle all clearing and settlement on the back end.

The bank also plans to let clients hold bitcoin alongside U.S. Treasuries, foreign bonds, and tokenized money market funds under a single safekeeping account. This structure would allow cross-margining between crypto and traditional assets.

Citi surveyed its institutional clients and found they do not want to manage wallets and private keys themselves. They want bitcoin exposure within familiar banking systems.

The Broader Push by Major Banks

Citi connects to more than 220 payment and settlement networks globally. It has launched Citi Token Services for cash, a live 24/7 blockchain-based network used to move money within its global system.

JPMorgan has taken a similar path with its JPM Coin product. The New York Stock Exchange also announced plans for a 24/7 blockchain-based trading venue for tokenized stocks and ETFs later this year.

The OCC conditionally approved five crypto-related national trust bank applications in December, including Ripple, BitGo, Fidelity Digital Assets, and Paxos. Stablecoin platform Bridge, owned by Stripe, and Crypto.com have since received conditional approvals.

Payoneer also filed for a national trust bank charter this month, which could allow it to issue a stablecoin and offer crypto services.

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