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State Street and Citi, which collectively oversee more than $70 trillion in assets under custody (AUC), are preparing to offer crypto custody services, marking a significant shift in Wall Street’s approach to digital assets.
According to a report in The Information, State Street is expected to begin custodying Bitcoin and other cryptocurrencies in 2026, while Citi has also signaled its intent to provide crypto custody, though a timeline remains undisclosed.
State Street and Citi’s move into crypto custody reflects a broader shift in institutional finance, driven by increasing demand, regulatory clarity, and new revenue opportunities. Institutional investors, including asset managers and hedge funds, are seeking secure ways to hold digital assets, and traditional banks risk losing these clients to crypto-native firms if they do not offer similar services.
Regulatory barriers have also begun to ease, with the repeal of SAB 121 clearing the way for banks to hold digital assets on behalf of clients. At the same time, the business case for crypto custody is compelling—unlike traditional asset custody, which is a low-margin service, securing digital assets commands significantly higher fees.
State Street and Citi are not entering uncharted territory; both banks have already made strategic moves in digital assets. State Street has explored tokenization and partnered with digital asset firms to enhance its custody capabilities, while Citi has built infrastructure for tokenized assets and digital custody. Their foray into crypto custody is less about speculation and more about meeting client demand while staying competitive in a rapidly evolving financial landscape.
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The Role of Custodians in Crypto Markets
Crypto custody is far more complex than traditional asset custody due to the unique security challenges associated with private keys and blockchain transactions. Custodians must offer secure storage solutions while mitigating risks such as theft, fraud, and cyberattacks.
State Street has been preparing for this shift for years, having previously partnered with Swiss digital asset infrastructure firm Taurus to enhance its custody capabilities. The bank also appointed a new digital asset director last October, reinforcing its commitment to blockchain-based finance.
Citi, which manages $25 trillion in AUC, has taken a similar approach. The bank partnered with Metaco—acquired by Ripple in 2023—to develop its crypto custody solutions. Additionally, Citi launched the Citi Integrated Digital Assets Platform (CIDAP) and introduced an on-chain tokenization initiative, signaling a broader push into the digital economy.
With State Street and Citi joining the fray, the landscape of crypto custody is shifting from niche crypto firms to full-scale institutional finance. Their entrance into the market could provide much-needed legitimacy and security for institutional investors, further bridging the gap between traditional finance and digital assets.
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