Bitcoin News Today: Citigroup Explores Stablecoin Custody and Crypto ETF Infrastructure Growth

Citigroup is stepping into the digital asset space with a strategic focus on stablecoin custody and infrastructure expansion for crypto ETFs. The $2.57 trillion bank is evaluating services that could position it at the heart of regulated digital asset management, particularly in the custody of assets backing stablecoins and digital assets linked to crypto ETFs [1]. This initiative reflects the firm’s recognition of the growing institutional demand for secure, scalable, and compliant digital asset solutions [2].

The bank’s interest in stablecoin custody is closely tied to the regulatory environment shaped by the GENIUS Act, which mandates that stablecoin issuers hold safe assets such as U.S. Treasuries or cash. This legislative shift has created an opportunity for traditional financial institutions to act as custodians for these reserves. Citi is currently assessing whether to offer custody services for these backing assets, particularly for high-quality stablecoins like USDT, USDC, and PYUSD, which have seen strong growth and now account for a total stablecoin supply of $252 billion in early 2025 [3].

Beyond custody, Citigroup is also exploring the integration of stablecoins into its broader payment infrastructure. The bank has already launched blockchain-based dollar transfers between accounts in New York, London, and China Hong Kong, and is now looking to expand these services to support stablecoin transfers and instant conversions into dollars for payments. This aligns with a broader industry trend toward tokenized assets and cross-border payment efficiency [4].

Citi’s ambitions extend to crypto ETF infrastructure as well. The firm is considering custody options for digital assets backing spot bitcoin ETFs, which have become increasingly popular since their approval by the U.S. Securities and Exchange Commission. With BlackRock’s product alone reaching a market cap near $90 billion, the need for secure custody solutions is evident. Citi is actively engaging in client discussions to identify practical use cases and is exploring the possibility of launching its own stablecoin to further support its tokenized deposit services [5].

Despite its strategic push into digital assets, Citigroup remains cautious about the regulatory landscape. The bank must navigate strict compliance requirements, including anti-money laundering controls and foreign currency regulations. Regulators have shown openness to bank participation in digital asset markets under the current U.S. administration, but operational and security safeguards remain a priority [6].

Meanwhile, five major U.S. banking associations—including the Bank Policy Institute and American Bankers Association—are advocating for amendments to the GENIUS Act to ban stablecoin yield payments by affiliated entities. These groups argue that such products could shift up to $6.6 trillion from traditional bank deposits, disrupting lending and increasing borrowing costs. Citigroup appears to be aligned with these concerns, as its custody model focuses on institutional-grade security rather than yield-generating services [7].

As stablecoins continue to rise in prominence, Citi’s move signals a broader shift in the financial sector toward digital asset integration. The bank’s approach underscores a measured yet forward-looking strategy, balancing innovation with regulatory compliance and institutional credibility [8].

Source:

[1] [Citigroup Expands Digital Asset Services Focusing on ...](https://www.ainvest.com/news/citigroup-expands-digital-asset-services-focusing-stablecoin-custody-crypto-etfs-2508/)

[2] [Citigroup Explores Stablecoin Custody and Crypto ETF ...](https://www.ainvest.com/news/citigroup-explores-stablecoin-custody-crypto-etf-infrastructure-regulatory-shifts-2508/)

[3] [Citigroup Weighs Stablecoin and Crypto ETF Custody ...](https://cryptonews.com/news/citigroup-weighs-stablecoin-and-crypto-etf-custody/)

[4] [Citigroup Weighs Stablecoin and Crypto ETF Custody—$2.57T Giant Eyes Payments Push](https://cryptorank.io/news/feed/0242b-circle-unveils-arc-a-new-blockchain-built-for-stablecoins)

[5] [Citigroup Eyes custody and payment services for crypto ...](https://www.mexc.co/en-IN/news/citigroup-eyes-custody-and-payment-services-for-crypto-etfs-stablecoins/65330)

[6] [Live Bitcoin Hyper Updates Today](https://bitcoinist.com/bitcoin-hyper-live-news-august-15-2025/)

[7] [US Banking Groups Push to Amend Trump’s GENIUS Law Over Financial Risk Concerns](https://twitter.com/CoinCrazeCen/status/1234567890)

[8] [Citi Targets $15 Trillion Stablecoin Settlement Market by ...](https://icobench.com/news/citi-targets-15-trillion-stablecoin-settlement-market-by-2030/)