Citigroup Eyes Crypto Custody & Payment Services

Citigroup is diving deeper into the world of digital assets, signaling a growing acceptance of cryptocurrencies within traditional finance. The bank is actively exploring providing custody services for stablecoins, facilitating the growth of crypto ETFs, and leveraging blockchain technology for faster payments.

Stablecoin Custody

With new regulations on the horizon requiring stablecoin issuers to back their tokens with secure assets, Citigroup sees an opportunity to provide custody services for these reserves. Biswarup Chatterjee, a top executive at Citigroup, highlighted the bank's interest in safekeeping and administering the high-quality assets backing stablecoins, like U.S. Treasuries.

Crypto ETF Support

The approval of spot Bitcoin ETFs has fueled demand for secure custody solutions for the underlying digital assets. Citigroup is exploring providing custody services for digital assets backing crypto ETFs. Currently, Coinbase dominates this area, but Citigroup's entry could introduce competition and offer institutional investors a familiar and trusted custodian.

Faster Payments with Blockchain

Citigroup is also focused on improving payment efficiency using blockchain technology. They are developing services to allow clients to send stablecoins between accounts or convert them to dollars for instant payments, potentially bypassing the slow traditional banking system. They currently offer tokenized U.S. dollar payments between accounts in New York, London, and Hong Kong 24 hours a day.

Key Takeaways:

• Citigroup is actively exploring custody services for stablecoins and crypto ETFs.
• The bank is developing blockchain-based payment solutions to improve payment speeds.
• Evolving regulations and a more open stance from regulators are encouraging traditional financial institutions to embrace digital assets.
• This move strengthens overall adoption of digital assets and blockchain technology in mainstream finance.