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Global Custody Pro - 03 September 2025

Global Custody Pro - 03 September 2025

Chinese banks report custody numbers, Citi Securities Services report released, US regulatory agenda and more

Global Custody Pro
September 02, 2025 • Reading Time: 9 minutes

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Welcome to Global Custody Pro, read by custody professionals like you. I'm Brennan McDonald, Managing Editor. I write about the global custody industry, having spent over 12 years in financial services, including working at a global custody bank. An AI voice reads the audio version of this newsletter. Have feedback? Just reply to this email or connect with us on LinkedIn.

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Chinese Banks Report H1 2025 Custody Growth

China's major banks reported custody business growth in first-half 2025 earnings, with Industrial and Commercial Bank of China reporting RMB29.9 trillion in total assets under custody and RMB4.27 billion in net fee and commission income from custody services. Bank of China exceeded RMB22 trillion in custody assets, while Agricultural Bank of China reported RMB18.93 trillion, up 7.9% from year-end 2024.

ICBC reported gains across custody segments, with insurance assets under custody rising RMB680 billion to RMB8.8 trillion and mutual funds under custody at RMB4.8 trillion. The bank's global custody business reached RMB2.5 trillion, representing 8.3% of total custody assets, a 1.4 percentage point increase year-on-year. Agricultural Bank reported insurance under custody at RMB8 trillion, with both mutual funds and pension funds exceeding RMB2 trillion each.

Postal Savings Bank of China reached RMB5.99 trillion in custody assets, up over 10% from year-end, with custody fee income growth of over 17% year-on-year. Bank of China reported RMB4.7 trillion in global custody assets and RMB1.23 trillion in pension funds under custody, while serving as custodian for three science and technology ETFs. ICBC's custody network covers 92 markets worldwide with ICBC (Asia) custody exceeding RMB1.2 trillion, while Bank of China's network spans over 100 countries and regions.

Citi: 10% Market Tokenization Expected by 2030

Citi announced its fifth annual "Securities Services Evolution" whitepaper detailing how digital assets, accelerated settlements and AI adoption are expected to drive transformation of the global post-trade industry. The whitepaper, based on responses from 537 industry leaders, including financial market infrastructures, custodians, banks, and asset managers, found that 10% of global market turnover is expected to be conducted using digital assets and tokenised securities by 2030.

The research revealed significant momentum in settlement acceleration, with 76% of respondents actively working on T+1 initiatives in 2025 and 48% still optimising processes for North American T+1 settlements. Bank-issued stablecoins were identified as the primary enabler for supporting collateral efficiency, tokenisation of funds, and private market securities. At the same time, Asia Pacific has emerged as the leader in digital asset adoption.

GenAI adoption is accelerating across the industry, with 86% of firms piloting the technology and 57% specifically implementing it for post-trade operations. Chris Cox, Head of Investor Services at Citi, said the industry is "at the cusp of significant change" as market participants intensify focus on T+1, accelerate digital asset adoption and implement GenAI across operations.

Industry Groups Back US Leverage Ratio Reforms

ISDA, SIFMA and FIA have thrown their support behind proposed reforms to the enhanced supplementary leverage ratio, submitting a joint comment letter to the Federal Reserve, FDIC and OCC. The associations strongly endorsed the recalibration, emphasising the urgency of finalising and implementing the rule no later than January 1, 2026.

The industry groups argued that the recalibration would reduce the likelihood of the eSLR serving as a binding constraint, restoring its intended role as a backstop while enhancing banks' participation in low-risk, high-volume activities such as US Treasury intermediation. The associations noted this is particularly pressing given the impending industry move to mandatory clearing for US Treasuries, stating that properly calibrated leverage rules are essential to ensure liquidity and resilience in these markets.

Beyond the immediate proposal, the associations called for a comprehensive review of the US regulatory capital framework to ensure it promotes growth while mitigating risks. Their recommendations included recognition of cross-product netting under the standardised approach, consideration of reforms to Tier 1 leverage ratio requirements, and elimination of redundant long-term debt requirements for US global systemically important banks. The groups stated these changes would make the framework "more risk-sensitive, efficient and better aligned with broader economic policy objectives."

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🚀 Digital Asset News

Coincheck to Acquire French Crypto Prime Broker Aplo

Coincheck Group N.V. announced it has signed an agreement to acquire Aplo SAS, a French crypto prime brokerage for institutional investors, in an all-stock transaction expected to close in October 2025. Under the agreement, all outstanding shares of Aplo will be exchanged for newly issued ordinary shares of Coincheck Group.

Founded in 2019, Aplo currently serves more than 60 institutional clients, including hedge funds, asset managers, banks and large corporates, and was recently named "Prime Broker of the Year (EMEA)" at the 2025 Hedgeweek Global Digital Asset Awards. The company is registered as a Digital Asset Service Provider with the French AMF and is pursuing a full crypto asset service provider licence under the EU's MiCA regulation. All four founders - Oliver Yates, Arnaud Carrere, Simon Douyer, and Jacques Lolieux - will continue with the company post-closing.

The acquisition represents Coincheck's first move in its strategy to expand beyond Japan into European retail and institutional crypto markets. The companies plan to accelerate product development, including financing solutions for capital efficiency, expanded liquidity access across jurisdictions, and a B2B2C offering enabling banks to provide crypto investing to their customers through Aplo's execution platform.

CFTC Clarifies Foreign Exchange Registration Framework

The Commodity Futures Trading Commission's Division of Market Oversight issued an advisory on August 28, clarifying the registration framework for foreign boards of trade (FBOTs), the regulatory category for non-U.S. exchanges that provide direct market access to American traders. The guidance applies to all markets, including traditional and digital asset platforms, reaffirming the CFTC's longstanding approach to cross-border exchange registration.

Acting Chairman Caroline D. Pham characterised the advisory as providing regulatory clarity after what she described as years of "regulation by enforcement" that drove trading activity offshore. The CFTC has received increased inquiries about FBOT requirements amid confusion over whether non-U.S. exchanges should register as FBOTs or as designated contract markets (DCMs), following recent enforcement actions the agency acknowledges were based on "novel interpretations."

The advisory signals a shift in the CFTC's approach to international crypto exchanges, with Pham stating that American companies forced to establish foreign operations now have "a path back to U.S. markets." The FBOT framework, which has existed since the 1990s, allows U.S. persons to trade on foreign exchanges registered with the CFTC, providing an alternative to full domestic exchange registration.

Cactus Custody Partners with Fosun Wealth Holdings

Cactus Custody, a Matrixport Group subsidiary, announced on 1 September a partnership with Fosun Wealth International Holdings Limited to launch custody and OTC trading services for institutional clients. The collaboration aims to enhance secure and efficient institutional asset operations through automated workflows and risk management systems.

The services feature segregated custody accounts, automated fund transfers post-transaction confirmation, and proactive risk monitoring with customisable trading limits. According to the announcement, standardised interfaces connect services across account verification, instruction transmission, quota management and settlement reconciliation, with every step adjustable and traceable. The company stated that the partnership addresses the increasing demands of Asian institutions for efficient custody services, which require stricter requirements for speed, compliance, and transparency.

Wendy Jiang, General Manager of Cactus Custody, said the company focuses on "building robust infrastructure with clear accounts, transparent processes, and controlled risks." Zhao Chen, Director of Digital Asset Business at Fosun Wealth Holdings, stated the partnership "enhances process reliability, paving the way for future innovation." Fosun Wealth Holdings, wholly owned by Fosun International Limited, holds multiple Hong Kong regulatory licences, including virtual asset dealing service licences obtained in June 2024.

Ripple Launches Institutional Custody Best Practices Report

Ripple and the Blockchain Association of Singapore (BAS) have launched a report outlining best practices for institutional digital asset custody, with a focus on stablecoin infrastructure and cybersecurity. The report, developed by BAS sub-committees, guides institutions in establishing custody frameworks aligned with enterprise demands and regulatory standards, particularly addressing Singapore's Digital Payment Token requirements.

The initiative comes as institutional adoption accelerates, with Ripple's 2025 New Value Report indicating that 71% of APAC financial institutions have grown more confident in digital assets over the past six months. According to Ripple and Boston Consulting Group, tokenised real-world assets could reach US$18.9 trillion by 2033, driving demand for secure custody infrastructure.

The report emphasises five key areas: compliance-by-design architecture, flexible custody models tailored to business needs, operational resilience, strong governance frameworks, and integration capabilities for scaling stablecoin adoption. Ripple highlighted its RLUSD stablecoin, issued under a New York Trust Company Charter, as an example of regulation-first approaches to digital asset infrastructure.