Morning Minute: The Banks Are Coming for Crypto Custody

Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt. Subscribe to the Morning Minute on Substack.

GM!

Today’s top news:

• Crypto majors rally Monday before reversing; BTC +2% at $67.4k
• Uniswap won full dismissal of case claiming damages for scam tokens
• The BTC ETFs drew $458M in net inflows on Monday
• Saylor ($200M) and Tom Lee ($100M) continue buying BTC & ETH
• Kalshi & Polymarket may be halted in Nevada after Federal Court says federal law doesn’t preempt state law

🏦 The Banks Are Coming for Crypto Custody

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

📌 What Happened

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

Morgan Stanley filed an application with the OCC on February 18 for a national trust bank charter. The proposed entity, Morgan Stanley Digital Trust, National Association, would offer custody, trading, swaps, staking, and stablecoin issuance under one federally regulated roof. The firm’s head of digital assets, Amy Oldenburg, confirmed at the Bitcoin for Corporations conference on February 25 that the bank wants to bring Bitcoin trading, lending, yield, and custody in-house.

Citigroup announced it will launch institutional Bitcoin custody this year, letting clients hold BTC inside the same safekeeping accounts they use for equities, bonds, and cash. Citi’s Nisha Surendran, who heads the product buildout, called it making “bitcoin bankable.”

Barclays separately sent RFIs to tech providers for a blockchain payment platform supporting stablecoins and tokenized deposits, with a vendor selection target of April. The bank already has a stake in Tether-adjacent stablecoin startup Ubyx.

🗣️ What They’re Saying

“We will be offering our clients a single service model across crypto, securities and money,” said Citi’s Nisha Surendran.

Oldenburg on Morgan Stanley’s approach: “We can’t just primarily rent the technology to do this. People expect Morgan Stanley - they trust our brand - to be no fail.”

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

🧠 Why It Matters

Morgan Stanley has $8T in AUM.

A meaningful slice of that client base already holds crypto off-platform. They’re betting that a portion of those clients will bring those holdings in house.

And the trust bank structure means Morgan Stanley could custody client assets, run staking validators, issue stablecoins, and facilitate tokenized asset trades, competing directly with Coinbase Custody, BitGo, and Anchorage.

Citi’s version is about cross-margining. Clients will be able to pledge crypto against traditional positions in the same account structure. That changes the collateral game for institutions running crypto alongside equities and fixed income.

What makes this story different from every “banks are coming” headline cycle before it: they’re actually here now, and lining up deep.

There are now OCC charter applications in the queue from Morgan Stanley, Coinbase, Stripe-owned Bridge, Crypto.com, and World Liberty Financial simultaneously. The OCC processed fewer than four de novo charter applications per year on average between 2011 and 2024. In 2025 and 2026 alone, 14 have been filed.

So what does it all mean?

Well it’s hard to imagine these TradFi giants would go through the effort to bring crypto in-house if they thought the industry was going to zero. Their adoption is a signal that they view what was once a frontier tech as maturing.

It’s bullish. Now we just need to be patient and let the bull case play out…



🌎 Macro Crypto and Markets

• Crypto majors are green after major gains on Monday; BTC +2% at $67.4k; ETH +2% at $1,968; SOL +1% at $84
• NEAR (+11%), CHZ (+9%), Morpho (+7%) and Virtuals (+7%) led top movers
• Stock futures are deep red after oil jumped 8% and concerns over a prolonged Iran War rise
• Bitcoin hit $70K briefly Monday amid the US-Iran conflict before pulling back, with other majors ETH, Solana, and HYPE all posting big gains as well before reversing
• CRCL stock gained 15% on Monday, now up nearly 60% since last week’s Q4 earnings call
• A new Senate housing package deal is moving forward with a ban on CBDCs, backed by the White House
• Uniswap won a full dismissal in the remaining state-level claims against them which aimed to make them liable for scam tokens trading on the protocol
• Chinese banks are freezing accounts belonging to users who mention “Bitcoin,” “Dogecoin,” or “USDT” in wire transfer memo fields, with China Construction Bank customers reporting no path to unfreeze
• Bitcoin’s BIP-110 governance fight escalated Monday as mining pool Ocean produced the first block signaling support for the temporary soft fork targeting non-monetary data

Corporate Treasuries & ETFs

• The Bitcoin ETFs saw $458M in net inflows on Monday, with ETH ETFs seeing $38.7M
• Strategy bought 3,015 BTC for $204M last week at an average price of $67,700, bringing total holdings to 720,737 BTC
• Tom Lee’s BitMine added 50,928 ETH valued at $98M last week, bringing total holdings to 4.47 million ETH (3.71% of supply); the firm now has 3M ETH staked, generating $172M in annualized staking revenue
• Core Scientific sold $175M in Bitcoin in January as it pivots to AI data centers

Meme Coin Tracker

• Meme majors were mostly red; DOGE -1%, SHIB -1%, PEPE -0.2%, TRUMP -1%, PENGU +2%, SPX +1%, FARTCOIN +5%
• WAR (+33%), Jellyjelly (+24%), and Punch (+20%) led notable movers on Solana
• The VVV token briefly jumped 30% to nearly $8 on Monday before settling at $6.75 ($295M); FAI jumped 120% to $26M following the move

💰 Token, Airdrop & Protocol Tracker

• Kalshi and Polymarket are at risk of being halted for trading in Nevada after a Federal Court sent their latest dispute back to state court, saying the Commodity Exchange Act does not preempt state law
• The CFTC named crypto defense attorney David Miller to lead its enforcement division; Miller previously represented hedge funds and crypto clients at Greenberg Traurig and served as a federal prosecutor in the SDNY
• Bybit shared that AI-driven onchain monitoring has helped users recover $300M in losses in 2025 and helped defend against attacks

🚚 What is happening in NFTs?

• NFT leaders were slightly red; Punks even at 29.9 ETH, Pudgy -1% at 4.44 ETH, BAYC -2% at 5.86 ETH; Hypurr’s -1% at 455 HYPE
• No notable top movers