Citigroup is gearing up to expand its presence in the digital asset market, targeting custody and payments solutions for stablecoins and cryptocurrency exchange-traded funds (ETFs) as part of its broader blockchain strategy.
Speaking to Reuters, Biswarup Chatterjee, Citi’s global head of partnerships and innovation, said the U.S. banking giant sees “providing custody services for those high-quality assets backing stablecoins” as its first priority. The move comes as Washington signals a more favourable regulatory stance toward crypto, with landmark stablecoin legislation and new banking guidelines creating fresh opportunities for institutional adoption.
Citi already operates a tokenized asset service that uses blockchain to facilitate 24/7 U.S. dollar transfers between bank accounts in London, New York, and Hong Kong. Building on this infrastructure, the bank is exploring stablecoin payment services and plans to offer custody for crypto ETFs—a sector experiencing rapid growth following the U.S. Securities and Exchange Commission’s approval of spot Bitcoin ETFs in early 2024.
The spot Bitcoin ETF market has swelled to more than $158.6 billion in total net assets, led by BlackRock’s iShares Bitcoin Trust with $91 billion. Other major issuers include Fidelity Investments, Grayscale, Ark & 21Shares, and Bitwise.
“There needs to be custody of the equivalent amount of digital currency to support these ETFs,”
Chatterjee noted, highlighting a gap in the market currently dominated by Coinbase, which safeguards over 80% of crypto ETF assets in the U.S.
Citi, alongside State Street, first signaled its interest in the crypto custody space earlier this year, coinciding with the launch of its CIDAP digital asset platform. With competitors like Bank of America, Morgan Stanley, JP Morgan, and Fiserv also ramping up their crypto initiatives.
Meanwhile, a separate report from Citigroup highlights that If the U.S. enacts a regulatory framework for stablecoins, it could unlock over $1 trillion in new demand for U.S. Treasuries and make stablecoin issuers some of the largest holders of government debt by the end of the decade.
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