Banks Flood Crypto Market with New Custody Services
The bank custody market is rapidly evolving as traditional banks rush to provide crypto custody services. In just two years, five major banks, Citigroup, BNY Mellon, State Street, Standard Chartered, and U.S. Bank, have either launched or committed to launching direct crypto custody services.
This shift is largely due to regulatory changes that removed the barriers to bank participation in crypto custody. In January 2025, the SEC rescinded Staff Accounting Bulletin 121, which forced companies holding crypto on behalf of clients to record a corresponding liability on their own balance sheet. This change made it economically irrational for banks to hold crypto.
The OCC followed with Interpretive Letters 1183 and 1184 in May 2025, confirming that national banks may custody crypto assets without prior approval. The removal of this requirement turned crypto custody from a special privilege into a standard banking power.