U.S. Banks Rush to Crypto Custody Market as Trump Pushes Clear Regulations

U.S. Banks are increasingly eyeing the crypto custody market, emboldened by President Donald Trump's pro-crypto stance and push for clear regulations. This shift has sparked excitement on Wall Street, with several large banks exploring the possibility of entering the market.

Coinbase, a leading cryptocurrency exchange, is in talks with banks to offer custody and trading services as a partner. However, many banks are still awaiting regulatory approval from the Federal Reserve and the New York Department of Financial Services, which may delay their entry into crypto trading.

Citigroup, with $2.4 trillion in assets, is considering adding crypto custody services, following a successful proof of concept project that demonstrated its ability to issue and store tokenized private equity funds on a blockchain network. The bank joins other major financial institutions, such as BNY Mellon, Standard Chartered, HSBC, and a joint venture between Crédit Agricole and Banco Santander, in the growing digital asset custody space.

State Street, managing $44.3 trillion, has partnered with Taurus to offer crypto custody and tokenization services for institutional investors. Meanwhile, Jerome Powell, the Federal Reserve Chair, has stated that U.S. banks with proper risk checks could serve crypto clients. However, concerns about debanking tied to new technology persist, and Powell has promised to work with Congress to address this issue.

More banks are also considering crypto services. In January, Morgan Stanley-backed E-Trade hinted at offering crypto services, while Goldman Sachs said it would consider digital asset operations if regulations allowed. As the U.S. crypto scene continues to boom under President Trump's pro-crypto stance, banks are increasingly exploring the opportunities presented by the crypto market.