Can crypto trust firms compete with banks in US derivatives settlements?

Crypto companies are moving deeper into financial services traditionally dominated by banks, seeking a role in US derivatives settlements, where billions of dollars change hands daily.

The push comes as regulators expand the services trust companies can provide, even as traditional banking groups challenge parts of the regulatory framework governing crypto firms’ expansion into banklike activities.

A Nov. 5 decision by the Commodity Futures Trading Commission (CFTC) illustrates the shift, allowing derivatives clearinghouses to use trust companies for daily settlements with clearing members, a function previously restricted to banks under the agency’s regulations.

The relief could create new business opportunities for regulated crypto custodians, but its revocable nature and changes in the US political landscape raise questions about the durability of the regulatory opening.