What happened this week in the world of blockchain and cryptocurrencies? The most relevant local and international events as well as appealing background reports in a concise and compact weekly review.
Selected articles of the week:
The Wall Street bank Morgan Stanley has lifted its previous restrictions on crypto investments. Starting this week, clients across all wealth levels will gain access to Bitcoin and Ethereum funds. Barriers to digital assets are falling – driven in large part by growing client demand. Crypto investments are becoming increasingly accessible to investors, part of a global trend that is particularly visible in the United States. The latest example is asset manager Vanguard, one of the world’s largest, which had long resisted digital assets but is now opening up. With Morgan Stanley, another heavyweight is following suit by removing its prior restrictions on digital asset exposure. The decision underscores that crypto investments have reached the financial mainstream, with traditional institutions increasingly competing directly with pure crypto platforms.
Morgan Stanley opens crypto funds to all clients and will soon enable Bitcoin, Ether, and Solana trading via E*Trade
Another global bank plans crypto services
Citi announced this week that it plans to launch its own crypto custody service by 2026. Institutional clients will be able to securely manage native digital assets such as Bitcoin and Ether through Citi’s infrastructure. The bank has been working on the project for two to three years, exploring both in-house solutions and partnerships with third parties. The goal is to develop a “credible custody product” for asset managers and other institutional investors. Citi is also considering issuing its own stablecoin. With its entry into the custody business, the bank positions itself alongside competitors such as BNY Mellon and Standard Chartered, which already offer digital asset custody solutions.
Citi plans to launch its own crypto custody services for institutional clients in 2026, featuring hybrid solutions and a potential stablecoin strategy.
No progress for altcoin ETFs
In September 2025, the SEC introduced new generic listing standards for spot crypto ETFs. These are designed to significantly speed up the approval process – from up to 240 days to around 75 days. The reform is seen as a milestone for the acceptance of altcoin ETFs and as a signal that the integration of digital assets into regulated structures is gaining momentum. However, just as the first applications for Solana, XRP, and Cardano ETFs were to fall under the new framework, a U.S. government shutdown halted the SEC’s operations. Hopes for quick approvals have since stalled. According to official statements, while submissions via EDGAR remain possible during the budget impasse, active reviews, comments, or fast-tracking are suspended. Regular communication with issuers is also largely on hold.
U.S. government shutdown delays SEC decisions, leaving several crypto ETFs on hold for now.
Embarrassing error for Paxos
A major error in the stablecoin infrastructure of Paxos caused a stir this week. The issuer mistakenly minted 300 trillion U.S. dollars worth of PayPal USD (PYUSD). Within about 20 minutes, Paxos identified the error and destroyed the excess tokens. The incident highlights the sensitivity of stablecoins, even those considered regulated. A simplified mint-and-burn mechanism can generate extreme discrepancies within minutes, testing both trust and technical design. Paxos stated that the event was due to an internal test accidentally executed on the mainnet instead of a test environment. According to Paxos, PYUSD remains fully backed by U.S. dollars and Treasury bills, with a circulating supply of around 230 million tokens. PayPal has not commented on the incident.
Paxos accidentally minted 300 trillion USD in PYUSD before deleting them – technical error at a regulated stablecoin issuer.
Flash crash shakes the crypto market
In addition: After weeks of steady ETF inflows and a new all-time high, the crypto market was hit by a sudden shock last week – the kind even seasoned traders rarely experience. Within a few hours, prices of Bitcoin and other leading assets plunged, around 20 billion USD in leveraged capital was liquidated, and even the largest trading platforms reached their limits. The move was not only violent but also revealing: it underscored how deeply intertwined crypto and macro markets have become, and how quickly liquidity can dry up when confidence and risk appetite evaporate simultaneously.
A look back at the historic crypto flash crash of October 10, 2025, which put…
