Crypto Custody: Citi, BNY, State Street Lead Bank Push in 2026

Big banks now hold the bitcoin

For most of crypto's history, the biggest banks stayed out of safekeeping digital assets. They left that work to specialist firms and to exchanges that set up trust companies. That changed in 2026. The world's largest custody banks are now building, launching or buying bitcoin custody businesses, and they are doing it while Congress remains stuck on the main crypto market-structure bill. ETF demand has also turned choppy, and the public companies that hold bitcoin as their main treasury asset are under strain.

In short, institutional crypto is moving into existing bank infrastructure faster than federal law is changing. The custody race shows this most clearly.

Who is live and who is still building

All the reporting agrees that BNY is furthest along. The world's largest custodian, with $59.4 trillion in assets under custody, started holding bitcoin and ether for ETF issuers in 2022. In May 2026 it expanded custody to Abu Dhabi, its first direct crypto custody outside the US.37 BNY also added staking to its crypto custody service in August 2026 through a partnership.39 That matters because institutional clients increasingly want their holdings to earn a return, not just sit in storage.

Citi looks like the main new entrant. In February, the executive leading its digital asset custody buildout said the bank aimed to "make bitcoin bankable." Clients would hold bitcoin in the same safekeeping accounts as their securities and cash, with shared reporting, tax workflows and cross-margining.40 On August 18, Citi announced Custody+, a modular suite with bitcoin as the first supported asset. It targets a live launch before the end of 2026. Citi says it holds $34.5 trillion in assets under custody and administration.37 Coverage agrees on the plan. The open question is whether Citi meets its year-end date, and that will show how fast other banks follow.37

Reports on State Street disagree. One guide says the bank was preparing a 2026 launch through its State Street Digital unit, working with Copper and Taurus.35 Other reporting says State Street already launched a Digital Asset Platform with Taurus in January 2026, covering wallet management, custody and settlement for tokenized funds, tokenized deposits and stablecoins.37 Both may be right: the January launch appears focused on tokenized assets, so a separate offering for native crypto like bitcoin could still be coming. Until State Street makes that clear, it is best seen as live for tokenization but not yet fully live for bitcoin.

Standard Chartered is buying rather than building. It launched custody in the UAE in September 2024 and, in May 2026, what it called Hong Kong's first institutional crypto custody service from a global systemically important bank.35 It is also absorbing Zodia Custody, the custodian it co-founded with Northern Trust. The deal was expected to close by the end of August 2026 and brings support for more than 75 cryptocurrencies.37

Others are lining up. Morgan Stanley applied to the Office of the Comptroller of the Currency (OCC) in February 2026 for a national trust bank charter for an entity offering custody, trading, staking and stablecoin services.35 Deutsche Bank has reportedly planned a 2026 custody service with Bitpanda and Taurus.35 U.S. Bank already offers bitcoin custody to institutional managers through NYDIG as sub-custodian.36

Crypto-native custodians face a larger rival

The banks are entering a market that crypto-native firms built and still lead by size. Coinbase reported $246 billion in assets on its custody platform in June 2026. BitGo, listed on the NYSE since January 2026, reported $65.2 billion across 5,833 clients in the second quarter.39 Anchorage Digital remains the federally chartered crypto bank. Fidelity Digital Assets received a conditional national charter in December 2025.39 Independent rankings still put Coinbase, BitGo and Anchorage at the top for institutional custody.33

What has changed is who these firms compete against. Crypto-native custodians grew because banks could not compete, and that barrier is gone.37 One telling detail is that BNY, State Street, Deutsche Bank and U.S. Bank all depend on crypto specialists such as Taurus, Copper, NYDIG and Bitpanda for parts of their technology.353637 In practice, banks bring the client relationships and balance sheets, while crypto firms increasingly supply the software and sub-custody behind them. The firms most at risk are those that offer neither a bank charter nor technology that banks will license.

Agency rules opened the door, not Congress

The bank push rests mostly on regulator decisions, not new laws. The OCC's Interpretive Letter 1183, issued in March 2025, confirmed that national banks can hold crypto for customers without prior approval. Separately, the SEC's SAB 122 removed the accounting rule that had made custody costly for banks.39 A later OCC letter, 1184, confirmed that banks can execute trades for custody clients and use sub-custodians.37

States are acting too. Minnesota passed a law letting state banks and credit unions offer crypto custody from August 1, 2026, and banned crypto ATMs on the same day.38 At least 40 states and Puerto Rico had digital asset bills introduced or pending during the 2026 session.38

The federal market-structure framework has stalled. The CLARITY Act passed the House 294–134 in July 2025.21 On September 15, 2026, a Senate procedural vote to begin debate failed 49–50, well short of the 60 votes needed.23 Republican senators Collins, Hawley, Moran and Tillis voted no, and no Democrat voted yes, even though sponsors said they had made more than 100 changes Democrats requested.26 Coverage largely agrees that ethics rules covering officials' crypto holdings were the main sticking point, not the split between SEC and CFTC oversight.2527 Tillis entered a motion to reconsider, but no new vote had been scheduled as of late October.28 DLA Piper described the failure as nearly ending the chance of a market-structure law this year.25 With today's midterm elections setting the next Congress, the bill's prospects depend on that outcome.23

The stall matters for custody. The provisions with the broadest support in both chambers include treating bitcoin and ether as commodities and requiring customer assets to be segregated.26 Those rules would put bank custody on firm legal footing. For now, banks are building on agency guidance that a future regulator could revise. They are moving ahead anyway, which suggests they think client demand outweighs that risk.

ETF flows are volatile but still large

Spot bitcoin ETFs are the main source of institutional custody demand, and October was uneven. US spot funds ended the month with $515 million in net outflows. A $643.3 million outflow on October 30, the largest daily outflow since June, turned a positive month negative.7 Earlier, BlackRock's IBIT took in $665.2 million on October 19, its largest single-day inflow in a year.7

The gap between funds is the more telling pattern. IBIT took in almost $1 billion on its inflow days in October, while rival funds together lost about $1.5 billion.7 Fidelity's FBTC lost $1.9 billion year to date, while IBIT gained $4.2 billion.1 Morgan Stanley's MSBT has gathered $810.4 million since launch.1 Year-to-date totals vary by data provider and date, from roughly $0.4 billion in mid-October to about $850 million in late October.59 Over the longer run, the funds hold $98.1 billion in net assets with about $57 billion in cumulative inflows since January 2024.1 Because a few large custodians hold those assets, demand for bank-grade custody keeps growing even in months with outflows.

Treasury companies under strain

The weakest part of institutional bitcoin is the treasury-company model. As of June 22, 2026, 199 public companies held 1.264 million BTC, and the stock-price premium that made buying bitcoin with new shares profitable had shrunk across nearly the whole group.12 This premium is measured as mNAV, a company's market value divided by the value of its bitcoin.

Strategy, the largest holder with 848,517 BTC, shows the problem. It sold 6,948 BTC between May and August 2026 to fund preferred dividends and buybacks. It dropped its "never sell" stance in favor of "never be a net seller."13 In July it also introduced new investor metrics.13 Estimates of its premium vary with the method. One tracker shows 0.87 on a basic measure for October, while Strategy's own dashboard showed 1.12.13 Other trackers show 1.16 and 1.19.1611 Strategy reported a record of about $19 billion in third-quarter net income. Even so, its premium stayed near 1.1, and it still owes roughly $830 million a year in dividends and interest.20

Analysis: custody is moving to the banks

Taken together, the coverage points one way. Regulated banks are building bitcoin into the systems that already hold trillions in traditional assets. Meanwhile, the fastest-growing route of 2024 and 2025, buying bitcoin through treasury-company stock, is losing its appeal. ETF flows remain volatile but have not reversed the long-term buildup, and that buildup is what the big custodians are competing to hold. The CLARITY Act's failure has not slowed the banks, but it leaves their custody businesses resting on agency guidance rather than law. Watch two things next: whether Citi launches Custody+ on schedule, and what the next Congress does with the bill.