Citigroup is exploring custody and payment services for stablecoins and crypto asset ETFs, signalling a decisive step towards deeper engagement with tokenised finance. The move follows the passage of new U.S. legislation that requires stablecoins to be fully backed by high-quality liquid assets such as Treasuries or cash, creating a clear opening for large, regulated banks to act as trusted custodians. By providing institutional-grade safekeeping of reserves and enabling fast, secure settlement, Citi aims to position itself as a key infrastructure provider in a market poised for significant growth.
The bank already operates blockchain-based U.S. dollar transfers between New York, London, and Hong Kong on a 24/7 basis. Under the leadership of Biswarup Chatterjee, global head of partnerships and innovation, Citi is considering expanding this service to include stablecoin transfers and on-demand conversion into dollars for near-instant settlement. This would offer institutional clients the speed and efficiency of digital tokens without sacrificing the oversight and compliance standards of traditional banking.
Demand for robust custody services is also rising with the growth of spot Bitcoin ETFs, where Coinbase currently dominates with over 80 per cent market share. Citi’s entry could diversify options for asset managers seeking secure, regulated storage for the underlying digital assets, while opening new revenue streams in an increasingly competitive space.
For the wider banking sector, the shift reflects an inflection point. The introduction of the GENIUS Act has legitimised stablecoins in mainstream finance, compelling banks to consider not only potential risks—such as deposit displacement—but also new opportunities in issuance, reserve management, and digital settlement. Citi’s exploration signals a pivot from a defensive stance on crypto towards a strategy of selective integration, aimed at blending compliance rigour with fintech agility.
If implemented effectively, the plan could help bridge the gap between traditional financial infrastructure and emerging tokenised markets, giving Citi an early advantage in shaping the operational and regulatory standards of this evolving sector. In doing so, it would place the bank at the forefront of the next phase of digital finance—where speed, transparency, and trust become equally critical pillars of service.
