Wall Street Giants Move to Mainstream Bitcoin
Citi and Morgan Stanley are actively building infrastructure to make Bitcoin "bankable". The initiatives aim to integrate crypto into core custody, trading, and reporting systems, signaling a major strategy shift to embrace crypto-native rails within traditional finance.
This push is years in the making; Citi has been developing its underlying infrastructure for over three years, aiming to seamlessly connect its vast network of over 220 global payment systems with blockchain technologies. The bank's strategy involves launching institutional-grade bitcoin custody later in 2026, a move described by Citi's head of digital asset custody, Nisha Surendran, as an effort to "make bitcoin bankable." Morgan Stanley is pursuing a similar path, filing for a national trust bank charter to custody crypto directly, a significant step beyond relying on third-party custodians. This allows for foundational control over client assets and enables services like staking. The firm has also appointed Amy Oldenburg as Head of Digital Asset Strategy to formalize crypto as a core priority and plans to offer custody, trading, and lending services for Bitcoin. The broader context is a market-wide shift driven by client demand and regulatory clarity. The approval of spot Bitcoin ETFs managed by firms like BlackRock and Fidelity has accelerated the digital asset initiatives of traditional banks. Furthermore, 2025 saw significant regulatory progress, such as the passage of the GENIUS Act, which created a federal framework for stablecoins and encouraged banks to engage with crypto. This institutional embrace extends beyond Bitcoin. JPMorgan's Kinexys division is focused on tokenization, representing real-world assets like property as digital tokens on a blockchain to simplify transactions. This tokenization market for illiquid assets is projected by Boston Consulting Group to be a $16 trillion opportunity by 2030, signaling a massive potential shift in market structure. Competitors are not standing still. Goldman Sachs, after some initial caution, revived its crypto trading desk in 2025 and is exploring tokenization and stablecoins. JPMorgan has been a long-standing participant with its JPM Coin, a digital token representing U.S. dollar deposits that enables nearly instantaneous settlement for institutional clients. The engineering challenge involves integrating new technology like digital wallets and key management with legacy custody systems, a process Citi has been working on for several years. Banks must decide whether to build or buy their custody infrastructure, balancing the security of offline cold storage with the speed of other solutions. The goal is to abstract the complexity for clients, allowing them to use familiar interfaces like SWIFT and APIs for transactions. This move is also a competitive necessity. As Fidelity CEO Abigail Johnson noted, institutions that fail to upgrade from legacy systems offering three-day settlement will lose business to those providing instant settlement via blockchain. By bringing digital assets into the same reporting and control frameworks as traditional securities, these banks aim to create a single, unified service model for money, securities, and crypto.
