Citadel and Fidelity just made their clearest move yet to rebuild crypto like Wall Street

EDX Markets, a venture backed by financial giants like Citadel Securities, Fidelity, and Charles Schwab, is pursuing a federal trust bank charter. This move aims to fundamentally restructure the cryptocurrency market by separating core functions such as custody, settlement, and asset management into federally supervised entities, akin to traditional Wall Street market structures. The application to the Office of the Comptroller of the Currency (OCC) highlights the contrast between crypto's historically integrated venues and the specialized roles prevalent in traditional finance. If approved, this could shift significant crypto infrastructure away from all-in-one exchanges towards regulated institutions, impacting control over custody, trade settlement, and institutional capital flow. EDX proposes a modular approach where its exchange handles order matching, while the trust bank manages custody, fiduciary asset handling, and settlement. This separation is seen as crucial for mitigating concentrated exchange risk and providing a more familiar framework for institutional investors. The move aligns with a growing trend of firms seeking federal trust bank charters, including those from Morgan Stanley and Ripple, suggesting a competitive race to establish institutional crypto infrastructure within the U.S. banking perimeter. The proposed settlement model, featuring end-of-day net settlement for spot trades and potential collateral posting instead of full pre-funding, aims to improve capital efficiency and reduce operational burdens for institutional participants, drawing parallels to mature market structures.

(Source：CryptoSlate)