Copyright © HT Digital Streams Limited All rights reserved. David Wignall, Barrons 3 min read 16 Oct 2025, 18:25 IST The announcements from Citigroup and Morgan Stanley come as several other banks push for greater cryptocurrency integration. (Illustration/File Photo: Reuters) Summary Citigroup is working on plans to preserve digital assets, while Morgan Stanley advisers can now offer crypto to all clients. Cryptocurrencies began as a rebellion against the centralized banking system. However, they continue to become mainstream as major banks, including Citigroup and Morgan Stanley, increasingly embrace them. The announcements from Citigroup and Morgan Stanley come as several other banks push for greater cryptocurrency integration. Citi, the country’s third-largest bank by assets, told CNBC on Monday that it is working on a crypto custody service, which it plans to launch in 2026. A spokesman for the bank confirmed the plans to Barron’s adviser, adding that Citi had not ironed out all the details. She said the bank was looking at developing an internal custody service as well as possible partnerships with third parties. Morgan Stanley is also revising its stance on cryptocurrencies. Starting Wednesday, the bank will allow its financial advisers to recommend crypto funds to any of their clients, according to a person familiar with the situation. In the past, only clients with aggressive risk tolerances and a minimum of $1.5 million in assets were eligible. Customers will also be allowed to place crypto funds in any of their accounts, including retirement accounts. Previously, they could only hold it in taxable brokerage accounts. CNBC reported on the changes earlier. For now, Morgan Stanley advisors will only be able to offer Bitcoin funds managed by BlackRock and Fidelity. But that could change soon, too: The bank is considering offering more funds and more coins outside of Bitcoin, the person confirmed. On September 23, Morgan Stanley also unveiled a partnership with startup Zerohash to allow retail clients of E*trade, a unit of Morgan Stanley, to trade popular coins. In an interview with Bloomberg News, a Morgan Stanley executive noted that the bank’s next step would be to build a complete wallet solution for its clients. Crypto assets are “highly speculative and could result in a loss of the entire investment,” Lisa Shalett, Morgan Stanley Wealth Management’s chief investment officer, wrote in a client note. The bank’s global investment committee recommended a portfolio allocation of up to 4% for the most opportunistic investors. The announcements from Citigroup and Morgan Stanley come as several other banks push for greater cryptocurrency integration. JPMorgan Chase, the nation’s largest bank, is partnering with Coinbase to allow its customers to link their bank accounts to Coinbase wallets starting next year. And several banks — including Citi, Bank of America and JPMorgan — have unveiled plans to use stablecoin-like products. Why now? For years, infrastructure issues have kept banks away from serving as custodians for digital assets. Because blockchain transactions are irreversible, cryptocurrencies are highly vulnerable to cyber security threats. The coins also settle 24/7, require constant monitoring, are highly volatile and are subject to strict auditing, custody and anti-money laundering standards – all headaches that banks have been slow to overcome. But regulatory hurdles have historically been the biggest barrier for banks to get involved in crypto. Under the Biden administration, various authorities have tried to keep traditional banks from becoming entangled with digital assets. The SEC issued a bulletin in 2022 suggesting that banks report held crypto assets as liabilities on their balance sheets — potentially subjecting them to higher capital requirements. “On-balance sheet treatment would prevent highly regulated banking organizations from providing a custody solution for digital assets at scale,” the American Bankers Association, Bank Policy Institute and other trade groups wrote in a letter to the SEC in 2024 calling for the bulletin to be changed. The Trump administration has taken a much more friendly approach. The SEC rescinded the bulletin at the beginning of this year, paving the way for traditional institutions to preserve crypto. President Donald Trump has also promised to create a “strategic crypto reserve” and Congress is in the process of passing a series of crypto-friendly bills. Write to editors@barrons.com Get all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download the Mint News app to get daily market updates. more topics #Morgan Stanley Read next story
Big banks warm to crypto. Here are the latest moves from Citi, Morgan Stanley.
