Will crypto custody firms gain foothold in US derivatives settlement market against traditional banks?
Digital asset custodians are entering a marketplace that processes billions of dollars in settlements each day, though regulatory uncertainties and congressional power shifts cast doubt on their future position.
Digital asset companies are penetrating further into traditional banking territory, pursuing opportunities in the US derivatives settlement market where billions of dollars flow through the system each day.
This movement coincides with regulatory authorities broadening the scope of services that trust companies may offer, while established banking industry organizations mount legal challenges against portions of the regulatory structure that governs crypto firms' entry into banking-adjacent operations.
A regulatory determination made on Nov. 5 by the Commodity Futures Trading Commission (CFTC) demonstrates this transition, permitting derivatives clearinghouses to utilize trust companies for conducting daily settlements with their clearing members, an operational function that agency regulations had previously limited to traditional banking institutions.
This regulatory accommodation could unlock fresh commercial prospects for licensed crypto custody providers, though its temporary status and the evolving US political environment present uncertainties regarding how permanent this regulatory pathway will prove to be.
Crypto firms eye billions in daily derivatives settlements
The magnitude of the derivatives settlement industry provides context for understanding the commercial opportunity at stake.
CME Group, among the globe's most prominent derivatives marketplace operators, processed an average of $8.7 billion per business day via its clearing infrastructure throughout the first six months of 2026, representing an increase from $6.7 billion daily in 2025, based on regulatory disclosure documents.
These numbers reflect capital movements between clearing firms for settling profits and losses, as opposed to representing revenue collected by settlement banking institutions. They nonetheless demonstrate the magnitude of monetary transactions flowing through the infrastructure that trust companies may progressively support.
The Division of Clearing and Risk at the CFTC granted no-action relief on Nov. 5 in response to an Oct. 29 application from derivatives clearinghouse Nodal Clear, permitting clearinghouses to employ trust companies for daily settlement operations provided they satisfy identical evaluation and oversight standards that apply to conventional settlement banking institutions.
This determination resolves a discrepancy between federal commodities legislation, which authorizes customer funds to be maintained at either banks or trust companies, and CFTC Regulation 39.14, which provides a definition of settlement banks that encompasses only traditional banks.
Nodal Clear established a partnership with Coinbase during 2025 to incorporate USDC into US futures market trading. Cointelegraph has discovered that Coinbase Custody Trust was already anticipated to deliver daily settlement services as part of this arrangement.
Additional crypto companies have likewise broadened their institutional financial service offerings. On Nov. 4, BitGo introduced its Global Markets division, consolidating derivatives trading, financing, collateral management and settlement functionalities.
Coinbase's national trust bank charter additionally became operational on Nov. 6, authorizing Coinbase National Trust Company, which operates as a distinct entity from Coinbase Custody Trust, to deliver federally supervised digital asset custody operations.
Multiple prominent crypto companies have additionally obtained US national trust bank authorizations throughout recent months, including Circle, Ripple, Crypto.com and Stripe-owned Bridge. These charters, issued by the Office of the Comptroller of the Currency (OCC), demonstrate the sector's movement into federally supervised financial services.
Traditional banks contest crypto firms' expanding role
The growth of specialized trust company operations has triggered opposition from conventional banking industry organizations.
During October, the Independent Community Bankers of America initiated litigation against the OCC, contending that its national trust bank charter regulations might enable crypto companies to perform specific banking-like operations without satisfying all regulatory obligations placed upon traditional banking institutions.
This legal action represents a wider dispute regarding appropriate regulatory frameworks for specialized financial institutions as they enter service areas traditionally provided by banks.
Cody Carbone, CEO of The Digital Chamber, communicated to Cointelegraph that the CFTC's relief measure does not place trust companies in either an advantageous or disadvantageous position relative to traditional banking institutions.
A trust company charter is not a regulatory shortcut.
Cody Carbone, CEO of The Digital Chamber
Trust companies and traditional banks currently compete for services authorized under their individual charters, Carbone explained, noting that the determination provides clearinghouses with additional alternatives without restricting banks from maintaining their existing business relationships.
Revocable relief faces a changing regulatory landscape
Notwithstanding the prospective commercial opportunities, the CFTC's determination raises uncertainties regarding the stability of trust companies' long-term position in derivatives settlement operations.
The regulatory agency issued a no-action letter as opposed to formally modifying its regulatory framework. The correspondence indicates that CFTC staff members will not propose enforcement proceedings against clearinghouses utilizing trust companies for daily settlement operations when designated conditions are fulfilled.
In contrast to a formal regulatory amendment, which typically necessitates a public notice-and-comment procedure, staff no-action relief does not alter the foundational regulation and remains subject to withdrawal.
A change in Commission leadership could withdraw the CFTC Letter. More formal Commission action, such as amending the regulation, would be necessary to avoid this potential risk.
Jordan Yeagley, shareholder at Buchanan Ingersoll & Rooney
This uncertainty emerges during a politically consequential period for the regulatory agency. CFTC Chair Michael Selig continues as the regulator's only commissioner, notwithstanding a statutory framework establishing five commissioner positions. Selig has directed the agency beginning in December 2025, with four positions remaining unfilled as the regulator broadens its engagement with digital asset markets.
The political context is simultaneously transforming following the Nov. 3 US midterm elections, during which Democrats secured control of both congressional chambers.
The incoming Congress, assuming office during January, will possess enhanced authority to examine the CFTC's regulatory priorities. The Senate additionally maintains a function in confirming appointees to occupy the agency's unfilled commissioner positions, while both the House and Senate Agriculture Committees exercise oversight authority over the regulator.
Sen. Sherrod Brown, who prevailed in Ohio's Senate contest on Nov. 3 notwithstanding over $60 million in opposition expenditures from crypto-backed political action committees, may assume a significant position on the Senate Agriculture Committee.