Key Highlights
- Morgan Stanley has submitted paperwork to the OCC requesting a national trust bank charter dedicated to digital asset custody services
- The new entity, dubbed “Morgan Stanley Digital Trust,” will facilitate cryptocurrency custody, trading operations, swap transactions, staking services, and asset transfers
- Citigroup is preparing to roll out institutional bitcoin custody services before year-end, incorporating digital assets into existing traditional asset management systems
- Citi’s platform will enable institutional clients to oversee bitcoin holdings together with conventional securities and cash through unified account infrastructure with cross-margining features
- The developments reflect accelerating efforts by major financial institutions to build robust crypto infrastructure responding to surging client interest in digital assets
Morgan Stanley has officially submitted an application seeking a de novo national trust bank charter from the Office of the Comptroller of the Currency (OCC). Filed on February 18, the application identifies the proposed entity as “Morgan Stanley Digital Trust, National Association.”
Approval of this charter would authorize Morgan Stanley to provide digital asset custody services for its client base. The planned subsidiary intends to facilitate buying and selling activities, swap transactions, asset transfers, and cryptocurrency staking operations.
A national trust bank charter enables financial institutions to conduct fiduciary operations including asset safeguarding and custody responsibilities. This marks Morgan Stanley’s inaugural trust charter application targeting the cryptocurrency sector specifically.
Morgan Stanley has demonstrated aggressive expansion into digital assets recently. Last month, the firm appointed equity markets veteran Amy Oldenburg to oversee its newly formed crypto division and submitted applications to launch spot Bitcoin and Solana exchange-traded funds, subsequently filing for a staked Ether ETF.
The financial giant, managing approximately $8 trillion in total assets, is simultaneously introducing spot cryptocurrency trading capabilities through its E*TRADE platform. Additionally, the bank is assessing potential lending products and yield-generating offerings connected to digital assets.
Recent job postings reveal Morgan Stanley is aggressively recruiting talent for positions such as digital assets strategy director and digital assets product lead. The institution is also investigating wallet technology implementations throughout its wealth management platform.
Citigroup’s Bitcoin Custody Initiative
Citigroup has revealed intentions to introduce institutional bitcoin custody capabilities before the conclusion of this year. Nisha Surendran, overseeing Citi’s digital asset custody development, shared these plans during Thursday’s World Strategy Forum presentation.
Surendran characterized the objective as rendering “bitcoin bankable.” Citigroup aims to integrate bitcoin within identical custody frameworks, reporting mechanisms, and tax processing workflows currently employed for conventional assets such as stocks and fixed income securities.
Institutional clients will have the capability to initiate transactions through SWIFT messaging, application programming interfaces, or graphical user interfaces. Citigroup will manage all clearing and settlement procedures internally.
The banking institution additionally intends to enable clients to consolidate bitcoin holdings with U.S. Treasury securities, international bonds, and tokenized money market fund shares within a unified safekeeping account structure. This framework would permit cross-margining between cryptocurrency and traditional asset classes.
Citigroup conducted internal research among its institutional client base and discovered they prefer not to personally manage wallets and private key security. Instead, they seek bitcoin exposure delivered through established banking infrastructure.
Industry-Wide Movement Among Banking Leaders
Citigroup maintains connections with over 220 payment and settlement networks worldwide. The bank has introduced Citi Token Services for cash management, a continuously operating blockchain-powered network facilitating money movement throughout its international operations.
JPMorgan has pursued comparable initiatives through its JPM Coin offering. The New York Stock Exchange separately disclosed plans for a round-the-clock blockchain-based trading platform for tokenized equities and exchange-traded funds scheduled to launch later this year.
The OCC granted conditional approval to five cryptocurrency-focused national trust bank applications last December, encompassing Ripple, BitGo, Fidelity Digital Assets, and Paxos. Stablecoin infrastructure provider Bridge, now owned by Stripe, and Crypto.com have subsequently secured conditional approvals.
Payoneer similarly submitted a national trust bank charter application this month, potentially positioning the company to issue stablecoin products and deliver cryptocurrency services.
