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 traditional finance.

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, exchanges for matching orders, and custodians for managing assets. In contrast, many crypto exchanges currently handle multiple roles, which can lead to risks and inefficiencies.

If EDX’s proposal is approved, it could set a precedent for other firms looking to enter the crypto space. By establishing a federally supervised trust bank, EDX aims to provide a more secure and transparent environment for institutional investors, who have been increasingly interested in crypto assets.

The move also signals a growing confidence in the long-term viability of crypto as a financial asset. By seeking regulatory approval for a trust bank, EDX is demonstrating its commitment to building a stable and reliable infrastructure for crypto, one that can withstand the scrutiny of federal regulators.

However, this approach also raises questions about the role of regulation in the crypto industry. While a more structured environment could bring benefits, it may also stifle innovation and slow down the development of new technologies.

In conclusion, EDX Markets’ bid for a federal trust bank charter represents a significant step toward integrating crypto more deeply into the U.S. financial system. By seeking to replicate the functional separation seen in traditional finance, Citadel Securities, Fidelity, and Schwab-backed EDX are aiming to create a more stable and regulated environment for crypto assets. The outcome of this application will be closely watched by the crypto community, as it could set a precedent for how the industry evolves in the years to come.