Citigroup is actively exploring the addition of payment services and custody for stablecoins, as well as custody services for cryptocurrency exchange-traded funds (ETFs).
This move is part of the bank’s broader strategy to expand into the digital asset space, driven by recent U.S. regulatory changes, particularly the GENIUS Act, which requires stablecoin issuers to back tokens with assets like U.S. Treasuries or cash.
Biswarup Chatterjee, global head of partnerships and innovation for Citigroup’s services division, indicated that the bank is prioritizing custody services for these high-quality assets backing stablecoins. Citigroup is also considering issuing its own stablecoin and is developing blockchain-based payment solutions, including tokenized U.S. dollar transfers for instant, 24/7 global transactions.
These efforts aim to streamline cross-border payments and compete with players like Coinbase, which currently dominates crypto ETF custody. Citigroup’s entry into stablecoin payment services and custody signals growing institutional interest in digital assets.
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As a major global bank, Citigroup’s involvement lends credibility to stablecoins, potentially encouraging other traditional financial institutions to follow suit. This could accelerate mainstream adoption of cryptocurrencies, particularly stablecoins, which are seen as less volatile and more suitable for payments and settlements.
Citigroup’s move to offer custody for stablecoins and crypto ETFs challenges existing players like Coinbase, which currently dominates the crypto ETF custody market. Increased competition could drive innovation, lower fees, and improve service quality for institutional clients.
Citigroup’s blockchain-based payment solutions, including tokenized U.S. dollar transfers for instant, 24/7 global transactions, could disrupt traditional payment systems like SWIFT, which are slower and more costly. Stablecoin-based payments could reduce transaction costs and settlement times.
If Citigroup issues its own stablecoin, it could compete with major players like Tether (USDT) and Circle (USDC). A Citigroup-backed stablecoin would likely prioritize regulatory compliance, appealing to risk-averse institutional clients and potentially capturing significant market share.
The involvement of a reputable institution like Citigroup could boost confidence in stablecoins, addressing concerns about their stability and backing. This is particularly relevant given past controversies around stablecoin reserves (e.g., Tether’s transparency issues).
Institutional-grade custody services could mitigate risks associated with hacks and mismanagement, further stabilizing the stablecoin market. Stablecoins are becoming a cornerstone of the crypto market, with a total market cap exceeding $200 billion as of mid-2025 (based on recent trends).
The approval of spot Bitcoin and Ethereum ETFs in the U.S. has spurred demand for custody services, as institutional investors require secure storage for digital assets. Citigroup’s entry into this space aligns with the growing popularity of crypto ETFs, which saw inflows of over $17 billion in 2024 alone (per recent data).
Blockchain-based payment systems are gaining traction as alternatives to traditional financial infrastructure. Projects like Ripple (XRP) and Stellar (XLM) focus on cross-border payments, and Citigroup’s tokenized U.S. dollar transfers align with this trend.
Stablecoins are integral to DeFi, enabling lending, borrowing, and trading without the volatility of other cryptocurrencies. Citigroup’s involvement could bridge traditional finance with DeFi, potentially leading to hybrid financial products that combine the benefits of both systems.
The growth of DeFi, with total value locked (TVL) exceeding $100 billion in 2025, underscores the increasing relevance of stablecoins in decentralized ecosystems. While stablecoins offer stability, the broader crypto market remains volatile, with Bitcoin and Ethereum experiencing significant price swings in 2024-2025.
By leveraging its expertise in traditional finance, Citigroup could enhance the credibility and efficiency of stablecoin ecosystems, driving competition and innovation. The broader market is moving toward greater integration with traditional finance, with stablecoins and blockchain-based payments at the forefront.