The Evolving Landscape of Bank Custody for Bitcoin in America

The landscape of cryptocurrency custody in America is undergoing significant changes as traditional banks increasingly enter the Bitcoin custody market. With regulatory barriers easing, major financial institutions are now equipped to manage and secure digital assets, marking a pivotal moment for the crypto community.

Key Entrants in the Custody Market

On August 18, 2026, Citigroup made headlines by announcing its Custody+ service, designed to integrate Bitcoin custody within its existing financial framework, which currently administers $34.5 trillion in traditional assets. The live launch of this service is anticipated before the end of the year.

Meanwhile, BNY Mellon, which boasts the title of the world’s largest custodian with $59.4 trillion in assets under custody, has already been involved with crypto. It began holding Bitcoin and Ethereum for ETF issuers in 2022 and further expanded its cryptocurrency services to Abu Dhabi in May 2026.

Recent Regulatory Changes Facilitating Bank Custody

Two pivotal regulatory changes in 2025 facilitated this shift. In January, the SEC rescinded Staff Accounting Bulletin 121, which had previously mandated that banks treating crypto assets must recognize corresponding liabilities, discouraging them from engaging in custody activities. Subsequently, the OCC confirmed that national banks could hold digital assets and execute transactions without needing prior regulatory approval, enhancing banks’ ability to enter the market.

The Emergence of a Competitive Landscape

The new regulatory framework has led to a swift development of bank custody platforms. Following BNY Mellon’s lead, other banks, including State Street and Standard Chartered, are either launching or expanding their crypto custody services. State Street introduced its Digital Asset Platform in January 2026, marking its entry into the digital asset market.

The growing presence of traditional banks raises questions about the future of crypto-native custodians such as Coinbase and BitGo, which have historically dominated this niche. Coinbase Custody manages approximately $376 billion in institutional crypto assets and has custody of more than 80% of U.S. spot Bitcoin and Ethereum ETF assets.

Market Dynamics and Institutional Demand

As the competitive landscape evolves, the focus is shifting toward service integration. Banks like Charles Schwab are offering comprehensive solutions, combining traditional asset management with crypto custody, which could challenge crypto-native firms that are limited in their scope.

Despite these challenges, demand for digital assets among institutional investors remains strong. A recent survey indicated that about three in four institutional investors plan to increase their allocations to digital assets, even as regulatory uncertainty persists.

Conclusion

The entrance of major banks into the Bitcoin custody market signals a significant transition in how cryptocurrencies are managed institutionalally. As competition intensifies, companies in the crypto-native space must adapt to maintain their foothold in a rapidly changing financial landscape. The future for Bitcoin custody looks to be shaped not just by technology, but by a blend of regulatory developments and evolving investor needs.