Citi and Morgan Stanley Signal a Shift as Wall Street Slowly Embraces Crypto

When traditional banks begin moving into crypto, it marks a turning point. On October 10, 2025, both Citi and Morgan Stanley announced major new crypto offerings steps that suggest Wall Street may finally be warming up to digital assets. For longtime crypto supporters, this could open doors to mainstream investment flows. For cautious observers, the question remains: are these genuine shifts or just safe experiments?

What Citi and Morgan Stanley Are Doing

Citi has launched a pilot program offering custody and tokenization services to select institutional clients. This means certain clients can hold and trade Bitcoin and Ethereum on Citi’s platform. The goal is to use blockchain-based settlement to reduce transaction times from days to minutes. While Citi had already explored stablecoins and tokenized real-world assets (RWAs), its CEO referred to this move as a “measured step” in bringing crypto into its core operations.

Morgan Stanley, meanwhile, has expanded retail access to crypto by enabling Bitcoin ETF trading through its E*Trade arm. The bank has partnered with Zerohash to provide backend services, making it possible for everyday investors not just institutions to gain exposure to Bitcoin via a regulated product.

Other large institutions are also shifting gears. JPMorgan’s Onyx platform has scaled up its tokenized money market offering to $1 billion, and Goldman Sachs has expanded its crypto desk, even adding support for Solana. All of this unfolds against a backdrop of a $4.5 trillion crypto market and $50 billion in ETF inflows for the year, raising pressure on traditional firms to adapt or be left behind.

Why These Moves Are Important

These announcements are significant for several reasons:

• Bridging gaps: Retail and institutional investors will gain safer, regulated entry points into cryptocurrencies.
• Market validation: Involvement by major banks lends credibility to crypto as a financial asset class.
• Technology adoption: Banks experimenting with tokenization signal that traditional finance is ready to use blockchain methods for faster, more efficient transactions.
• Competitive pressure: As these large firms step in, others may feel compelled to follow to avoid lagging.

However, caution is necessary. These moves are still early-stage experiments. Regulatory uncertainty, internal risk policies, and technological challenges may slow adoption or limit how aggressively banks engage.

Key Differences and Risks

Feature	Citi’s Move	Morgan Stanley’s Move
Focus	Institutional custody & tokenization	Retail access via Bitcoin ETF
Target Users	Large clients, institutional funds	Everyday investors through E*Trade
Core Offering	Holding and transacting crypto directly	Trading exposure to Bitcoin via ETF form
Technology Use	Blockchain settlement (faster transactions)	ETF infrastructure and custody partnerships
Risks	Regulatory scrutiny, security	ETF approval, market volatility

 

These risk factors make clear that while bank fabrications are shifting, the path forward is not free of uncertainties.

What Could Happen Next

If these bank initiatives succeed, they could unlock significant capital flows from institutional investors into crypto, helping to push future valuations upward. For instance, many analysts speculate that accelerated involvement by major institutions might support a crypto market expansion toward the $10 trillion range or more. But failure or half-measures could backfire. If banks only offer limited services or withdraw under pressure, it could reinforce the perception that crypto remains too risky for traditional finance. Delays in regulatory clarity or infrastructure issues could stall momentum.

A particularly optimistic scenario would see these bank moves paving the way for tokenized assets (stocks, real estate, bonds) to live on blockchain networks, expanding beyond just cryptocurrencies. That could reshape capital markets in profound ways.

For retail crypto holders, especially those in Bitcoin or Ethereum, these bank-backed access points lower technical and trust barriers. Using ETFs instead of wallets or exchanges may feel safer and more familiar. For institutions, custody services mean satisfying regulatory and security demands while accessing digital assets. Still, investors must remain cautious. The mere announcement of bank crypto services does not guarantee success. Market conditions, regulatory shifts, and internal decisions could all impact whether these services scale. Because these are early-stage moves, timing and adoption curves matter greatly.

Outlook

Citi and Morgan Stanley entering the space moves crypto from its fringe toward financial mainstream. If regulatory bodies like the SEC, FCA, or EU authorities provide clearer frameworks, banks may accelerate their offerings. But if rules remain murky or banks face too much internal resistance, these steps may remain cautious experiments rather than sweeping transformations.

This moment represents a crossroads: crypto could either gain a new wave of legitimacy or see skepticism reaffirmed if progress is slow. In the months ahead, the market will watch not only price movements but also the real infrastructure, adoption, and guardrails that major institutions are willing to build.

Whether this is the beginning of a broad institutional embrace or just the warm up before retreat depends on how well these pilot programs are executed—and how boldly the next steps are taken.