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

Citadel Securities and Fidelity Just Made Their Clearest Move Yet to Rebuild Crypto Like Wall Street

EDX Markets’ bid for a federal trust bank charter is not just another crypto expansion story. It is a live test of whether Wall Street-backed firms can move more of crypto’s custody and settlement stack inside the U.S. banking perimeter. Citadel Securities, Fidelity, and Schwab-backed EDX wants to bring equity market structure to crypto through a federal trust bank.

EDX Markets’ application for a federal trust bank charter opens a more consequential question than whether another large financial consortium wants deeper exposure to digital assets. The sharper question is whether some of the firms that helped shape modern U.S. equity market structure are now trying to impose a similar functional separation on crypto, with custody, settlement, collateral management, and fiduciary asset handling pulled into a federally supervised banking perimeter.

That framing comes directly from EDX Trust’s application to the Office of the Comptroller of the Currency. The filing argues that traditional financial markets evolved around specialized roles, brokers, exchanges, market makers, clearing institutions, and custodians, while digital asset markets developed around vertically integrated venues where execution, custody, and balance sheet functions often sit under one roof.

Why this matters: If this model wins approval and real flow, more of crypto’s back-end infrastructure could move away from all-in-one exchanges and toward federally supervised institutions. That would matter for who controls custody, how trades settle, and which firms become the preferred route for institutional capital.

EDX’s proposal attempts to redraw that map. Order matching would remain with EDX Markets, while the proposed national trust bank would handle custody, fiduciary asset management, settlement-related functions, and riskless principal activity.

This move by Citadel Securities, Fidelity, and Schwab-backed EDX represents a significant shift in the approach to crypto infrastructure. By seeking a federal trust bank charter, these firms are aiming to create a more structured and regulated environment for crypto assets, similar to the established frameworks in the traditional equity market.

The application highlights the need for a clear separation of duties in the crypto ecosystem. Traditional financial markets have long relied on specialized institutions for different functions, such as brokers for trading, custodians for asset management, and clearinghouses for settlement. In contrast, many crypto exchanges operate vertically integrated operations, combining these functions under a single entity.

If EDX’s proposal is approved, it could lead to a restructuring of the crypto industry, with more functions being handled by federally supervised banks. This would potentially increase transparency, reduce risk, and make the crypto ecosystem more attractive to institutional investors.

The move also raises questions about the role of regulators in shaping the future of crypto. The Office of the Comptroller of the Currency, which is reviewing EDX’s application, has the authority to grant or deny the trust bank charter. If approved, it could set a precedent for other firms looking to enter the crypto space with a similar structure.

In the broader context, this development is part of a larger trend of Wall Street firms investing in and supporting crypto infrastructure. As the crypto market continues to grow and mature, there is a growing recognition of the need for more robust and regulated systems to support its expansion.

EDX’s bid for a federal trust bank charter is a clear indication that Citadel Securities, Fidelity, and Schwab are committed to rebuilding crypto in the image of Wall Street. By seeking to impose a more structured and specialized approach to crypto infrastructure, these firms are positioning themselves as leaders in the industry’s evolution.

The outcome of EDX’s application will be closely watched by the crypto community and the financial industry at large. If approved, it could mark a turning point in the way crypto assets are managed and traded, bringing them closer in structure to traditional financial markets.

Ultimately, the success of EDX’s proposal will depend on the regulatory environment and the willingness of investors to adopt a more structured approach to crypto. However, the fact that Citadel Securities, Fidelity, and Schwab are taking such a clear and decisive step signals their confidence in the future of crypto and their determination to shape it in their image.