While Wall Street's two major banks pursue different strategies regarding crypto assets, they are sending positive messages about the future of digital finance. Citigroup plans to launch a crypto custody service by 2026, while JPMorgan Chase is currently holding off on the custody side but is ready to move into crypto trading and blockchain-based payment solutions.
Citi is preparing to offer a crypto custody service
Biswarup Chatterjee, head of partnerships and innovation in Citi's global services unit, told CNBC that the bank has been developing its crypto custody infrastructure for the past two to three years. "We are in a comprehensive exploration process across different areas. We expect to launch a reliable custody solution that we can offer to our asset managers and institutional clients in the next few quarters," he said.
Citigroup's plan aims to facilitate secure access to crypto markets for traditional finance. The bank focuses specifically on the regulatory compliance of digital assets and providing professional-grade security to institutional investors.
JPMorgan Remains on the Trading Side
JPMorgan, on the other hand, is pursuing a more cautious but also more flexible approach to its crypto asset strategy. Scott Lucas, head of the bank's global markets and digital assets unit, said on CNBC's Squawk Box Europe, "Jamie Dimon has been very clear about this; we will be involved in the trading side, but custody is not on the table right now."
Lucas stated that JPMorgan is interested in crypto trading and is in the process of establishing infrastructure in this area. While the bank plans to engage in digital asset trading, it is considering providing custody services through external partners. Lucas also touched on what JPMorgan calls the "and" approach: "For us, it's not just about choosing one. We aim to develop new solutions while evaluating opportunities in the current market."
The bank is also working on blockchain-based payment systems and stablecoin-like digital assets. JPMorgan's deposit token, called "JPMD," launched as a pilot on the Base network in June, aims to facilitate blockchain-based transactions for institutional clients. Lucas said, “We are very excited about this area. JPMD has great potential to offer new services to our clients with its stablecoin-like features.”
The statements from both institutions indicate a significant shift in the way major banks view crypto. While Citi is preparing for direct custody, JPMorgan is focusing on trading, payments, and tokenization.
The recent passage of the GENIUS Act in the US also supports this transformation. By regulating the full reserve requirement and auditing obligations of stablecoin companies, it has enabled major banks to enter the cryptocurrency market more safely.
