Morning Minute: The Banks Are Coming for Crypto Custody

Morning Minute is simply a regular newsletter written by Tyler Warner. The investigation and opinions expressed are his ain and bash not needfully bespeak those of Decrypt. Subscribe to the Morning Minute on Substack.

GM!

Today’s apical news:

• Crypto majors rally Monday earlier reversing; BTC +2% astatine $67.4k

• Uniswap won afloat dismissal of lawsuit claiming damages for scam tokens

• The BTC ETFs drew $458M successful nett inflows connected Monday

• Saylor ($200M) and Tom Lee ($100M) proceed buying BTC & ETH

• Kalshi & Polymarket whitethorn beryllium halted successful Nevada aft Federal Court says national instrumentality doesn’t preempt authorities law

Three of the world’s largest banks made crypto custody moves successful the past week.

Morgan Stanley, Citigroup and Barclays each made announcements related to crypto custody successful the past week.

Morgan Stanley filed an exertion with the OCC on February 18 for a nationalist spot slope charter. The projected entity, Morgan Stanley Digital Trust, National Association, would connection custody, trading, swaps, staking, and stablecoin issuance nether 1 federally regulated roof. The firm’s caput of integer assets, Amy Oldenburg, confirmed astatine the Bitcoin for Corporations league connected February 25 that the slope wants to bring Bitcoin trading, lending, yield, and custody in-house.

Citigroup announced it volition motorboat organization Bitcoin custody this year, letting clients clasp BTC wrong the aforesaid safekeeping accounts they usage for equities, bonds, and cash. Citi’s Nisha Surendran, who heads the merchandise buildout, called it making “bitcoin bankable.”

Barclays separately sent RFIs to tech providers for a blockchain outgo level supporting stablecoins and tokenized deposits, with a vendor enactment people of April. The slope already has a involvement successful Tether-adjacent stablecoin startup Ubyx.

“We volition beryllium offering our clients a azygous work exemplary crossed crypto, securities and money,” said Citi’s Nisha Surendran.

Oldenburg connected Morgan Stanley’s approach: “We can’t conscionable chiefly rent the exertion to bash this. People expect Morgan Stanley - they spot our marque - to beryllium nary fail.”

Bitwise CEO Hunter Horsley, reacting broadly: “People are going to beryllium stunned this year. The world’s largest institutions and corporates are coming afloat into crypto.”

Morgan Stanley has $8T successful AUM.

A meaningful portion of that lawsuit basal already holds crypto off-platform. They’re betting that a information of those clients volition bring those holdings successful house.

And the spot slope operation means Morgan Stanley could custody lawsuit assets, tally staking validators, contented stablecoins, and facilitate tokenized plus trades, competing straight with Coinbase Custody, BitGo, and Anchorage.