State Street and Citi Enter Cryptocurrency Custody Market
Two of the world鈥檚 leading custodian banks, State Street and Citi, have announced their entry into the cryptocurrency custody sector. These institutions oversee $46.6 trillion and $25 trillion in assets respectively, setting the stage to significantly impact the crypto custody landscape.
This shift follows the repeal of SAB 121, a 2022 regulation by the U.S. Securities and Exchange Commission (SEC) that had previously restricted banks from offering crypto custody services.
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-Citi
-State Street
The SEC annulled its controversial accounting guidelines on January 23, 2025, changing how financial institutions must handle cryptocurrency assets on their balance sheets. This new approach allows traditional banks to enter the crypto market more easily.
SEC Revoked SAB 121 Last Month
The SEC officially revoked its earlier guidance under SAB 121, facilitating a more favorable environment for banks entering the cryptocurrency space. The announcement allows firms to disclose their obligations related to safeguarding crypto assets while no longer requiring them to treat these as liabilities.
State Street’s Recent Move into Crypto
In 2024, State Street began its journey into the cryptocurrency market with a partnership with Taurus, a well-known player in the crypto sphere. Donna Milrod, State Street鈥檚 Chief Product Officer, stated, “The collaboration with Taurus underscores our ongoing commitment to become leaders in this evolving asset class, thus enhancing our ambition to offer clients a premium digital asset experience.”
Citi’s More Subtle Engagement
Citi’s exploration of the crypto market has been relatively quiet. They’ve ventured into blockchain-based initiatives in collaboration with startup BondbloX for tokenized bond custody and collaborated with Metaco, a company later acquired by Ripple, to advance their digital asset custody efforts.
Key Takeaways
- The regulatory relaxing occurs amid rising institutional interest in secure digital asset custody solutions.
- The annulment of SAB 121 opens the door for traditional banks eager to dive into the crypto market.
