Citigroup Explores Crypto Custody Amidst Growing Institutional Demand

Citigroup, a major global financial institution, is exploring the addition of crypto custody services to its offerings, according to sources familiar with the matter. This move comes on the heels of the bank's successful proof of concept project in February 2024, which demonstrated the ability to issue and custody tokenized versions of private equity funds on a blockchain network.

The bank's interest in crypto custody follows a broader trend among major financial institutions expanding into digital asset custody. BNY Mellon, for instance, has received regulatory approval for digital asset custody beyond Bitcoin and Ethereum ETFs. Standard Chartered has launched a digital asset custody facility in Dubai, while HSBC has announced plans for an institutional-grade custody service. Crédit Agricole and Banco Santander's joint venture has also secured crypto custody approval in France.

State Street, a leading provider of financial services to institutional investors, has also entered the crypto custody space. In August 2024, the company announced a partnership with Taurus to launch crypto custody and tokenization services for institutional investors. With approximately $44.3 trillion in assets under custody or administration, State Street's entry into the crypto custody market signals a significant shift in the industry.

The expansion of crypto custody services by major financial institutions reflects the growing demand for digital assets among institutional investors. As the crypto market continues to evolve, these institutions are positioning themselves to provide the necessary infrastructure and services to support this growth. However, regulatory approval remains a critical factor in the widespread adoption of crypto custody services.