Wall Street Giants Build Bitcoin Infrastructure as Traditional Banking Embraces Digital Assets
Major Wall Street institutions are racing to build comprehensive Bitcoin and cryptocurrency infrastructure, with Citigroup preparing to launch institutional custody services while Morgan Stanley expands digital asset offerings across its wealth management platform.
The banking sector’s accelerated move into cryptocurrency represents a fundamental shift in how traditional finance views digital assets. Where once Bitcoin was considered too risky or complex for mainstream banking, institutions now see opportunity in integrating crypto into their core services.
Citigroup’s Unified Asset Strategy
Citigroup plans to roll out institutional Bitcoin custody services later this year, according to Nisha Surendran, who leads the bank’s digital asset custody development. Speaking at the World Strategy Forum, Surendran outlined an ambitious vision to “make bitcoin bankable” by incorporating it into existing financial frameworks.
The initiative centers on creating a unified account structure where Bitcoin sits alongside traditional securities and cash holdings. Clients will manage cryptocurrency positions through the same reporting systems they use for stocks and bonds, with transactions processed via SWIFT, APIs, or standard user interfaces.
This integration approach addresses a key client demand identified through Citigroup’s internal surveys. found that institutional investors want Bitcoin exposure without managing private keys or wallet infrastructure themselves.
Cross-margining capabilities represent another significant development in Citi’s strategy. The bank envisions accounts containing US Treasuries, foreign bonds, tokenized money market funds, and Bitcoin under a single custody umbrella. This structure would allow clients to use crypto assets as collateral at traditional exchanges and vice versa.
Morgan Stanley’s Comprehensive Digital Push
Morgan Stanley, managing approximately $8 trillion in assets, has filed applications for Bitcoin, Ethereum, and Solana exchange-traded products while exploring wallet technology integration across its wealth platform. The firm is also implementing spot crypto trading capabilities on E*TRADE and evaluating lending products tied to digital assets.
Amy Golenberg, Morgan Stanley’s newly appointed head of digital assets, emphasized the importance of building internal capabilities rather than outsourcing technology. “We need to build this internally. We can’t just rent the technology,” Golenberg stated during the same industry event.
The wealth management giant’s approach reflects broader industry recognition that cryptocurrency infrastructure requires specialized development rather than third-party solutions. This internal build strategy positions Morgan Stanley to maintain control over client experience and security protocols.
Round-the-Clock Trading Infrastructure
Both institutions are adapting their systems for 24/7 market operations, a necessity as cryptocurrency trading never stops. Citigroup has developed Citi Token Services for cash, a blockchain-based network that moves money within the bank’s global system around the clock.
This infrastructure development aligns with broader market trends. The announced plans to launch a continuous trading venue for tokenized stocks and ETFs, while Nasdaq revealed intentions for nearly round-the-clock equity trading to match global market demands.
The push for continuous operations reflects institutional client requests for always-available trading capabilities. As Surendran noted, “As we move into the world of 24/7 assets like bitcoin, we definitely need 24/7 U.S. dollars or 24/7 digital money.”
Regulatory Framework Evolution
The banking sector’s expansion into cryptocurrency comes as regulatory clarity improves and client demand intensifies. Citigroup began with private permissioned blockchains before expanding to public networks as regulations solidified, following a similar path to JPMorgan’s JPM Coin development.
This measured approach allows banks to test blockchain technology in controlled environments while building compliance frameworks for broader cryptocurrency integration. success with institutional blockchain applications has provided a roadmap for other major banks.
The regulatory environment continues evolving as financial institutions demonstrate operational capabilities with digital assets. Banks are positioning themselves to capitalize on clearer guidelines while building infrastructure that meets compliance requirements.
Institutional Adoption Accelerates
The movement by Citigroup and Morgan Stanley reflects accelerating institutional adoption that began with BlackRock’s exchange-traded fund offerings. What started as limited exposure products has expanded into comprehensive digital asset integration across traditional banking services.
This evolution addresses years of institutional investor demand for cryptocurrency exposure through familiar financial channels. Rather than forcing clients to navigate separate crypto platforms, banks are bringing digital assets into existing wealth management relationships.
The integration approach also enables cross-asset strategies that weren’t previously possible. Clients can now consider Bitcoin alongside traditional portfolio components, potentially using crypto holdings for margin or collateral purposes within established banking relationships.
As major financial institutions build out cryptocurrency infrastructure, the distinction between traditional and digital assets continues blurring. Banks that successfully integrate these capabilities position themselves to capture growing institutional demand while maintaining client relationships built over decades of traditional financial services.
The race to build comprehensive cryptocurrency infrastructure reflects a broader recognition that digital assets represent a permanent addition to global financial markets. and institutional adoption trends suggest this integration will only accelerate as banks compete for cryptocurrency-focused business relationships.
