Citigroup is considering expanding its services to include custody and payment solutions for stablecoins and crypto exchange-traded funds . This strategic move comes in response to recent U.S. policy changes that support the broader adoption of stablecoins. Biswarup Chatterjee, Citi's global head of partnerships and innovation, stated that the bank is exploring providing custody for high-quality assets backing stablecoins, such as U.S. Treasuries and cash. This initiative follows new legislation requiring such backing for stablecoins, presenting opportunities for traditional financial institutions to enter the digital asset space.
In addition to custody services, Citigroup is evaluating stablecoin-based payment solutions aimed at enhancing settlement speeds and efficiency. The bank currently offers tokenized dollar payments via blockchain between major global cities and is developing services for sending or converting stablecoins. Furthermore, Citigroup is assessing broader digital asset services, including custody for assets underlying crypto ETFs, which have seen significant growth since the SEC approved bitcoin spot ETFs. Currently, Coinbase leads the ETF custody market, managing over 80% of this business.
Citigroup's potential expansion into the crypto sector reflects a shift in regulatory attitudes under President Donald Trump's administration. While firms must still comply with financial regulations, the administration's stance appears more accommodating toward digital assets. The bank is also contemplating launching its own stablecoin, indicating a growing interest in integrating blockchain technology into traditional financial services.
This development aligns with broader industry trends, as major financial institutions increasingly explore opportunities in the digital asset space. The move by Citigroup could signal a significant shift in how traditional banks engage with cryptocurrencies, potentially leading to more widespread adoption and integration of digital assets into mainstream financial services.
As the regulatory landscape continues to evolve, financial institutions like Citigroup are positioning themselves to capitalize on the growing demand for digital asset services. Their involvement could pave the way for more innovative financial products and services, bridging the gap between traditional banking and the emerging world of cryptocurrencies.
