State Street and Citi reportedly eyeing crypto custody services

State Street and Citi are considering offering crypto custody services. According to a report from The Information, the banks aim to provide safekeeping solutions to institutional investors, traders, and large funds.

A bank executive told the report that State Street plans to roll out crypto custody services next year. The institution is one of the world’s largest custody banks for traditional assets like stocks and bonds. 

Moreover, the report mentions that BNY Mellon, which already provides custody services for Bitcoin (BTC) and Ethereum (ETH), is looking to expand its offerings to include a broader range of tokens. 

Traditional financial institutions are increasingly involved in crypto, and this involvement is not limited to banks. Coinbase is also reportedly in discussions with banks regarding crypto trading and custody collaborations. 

Citi expanding into crypto

Citi, the third-largest US bank by assets, is also exploring its entry into the crypto custody space. 

According to sources cited in the report, the banking giant is considering a dual approach—developing its own custody services while also forging partnerships with external firms.

This news follows Citi’s successful completion of a proof of concept (PoC) on tokenizing private funds in collaboration with Wellington Management and WisdomTree. The pilot leveraged the Avalanche Spruce institutional test Subnet, and ABN AMRO simulated the role of a traditional investor.

Citi said its experiment sought to address the inefficiencies of private markets by bringing a Wellington-issued private equity fund onto a blockchain network and embedding fund distribution rules within smart contracts. 

The pilot also tested using private fund tokens as collateral in lending contracts with DTCC Digital Assets.

Expected move

Galaxy Digital’s head of research, Alex Thorn, predicted that large banks like Citi would begin moving into crypto services due to the rising institutional interest in digital assets and the crypto-friendly regulatory environment under the current administration.

In the firm’s 2025 predictions, Thorn said that the top four custody banks would add crypto-related services this year, with the Office of the Comptroller of the Currency (OCC) creating a pathway.

Out of the four banks mentioned by Thorn, only JPMorgan has yet to announce crypto custody services.

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