Bitcoin News Today: Citigroup Explores Stablecoin Custody and Payment Solutions Amid Regulatory Shift

Citigroup is making significant strides into the digital asset space by exploring stablecoin custody and payment solutions, reflecting a broader institutional shift toward blockchain-based financial systems. The U.S. bank is evaluating how stablecoins—cryptocurrencies typically pegged 1:1 to traditional assets like U.S. Treasuries or cash—can be integrated into its services to accelerate cross-border transactions and provide more efficient payment options for clients. This initiative aligns with new U.S. legislation that allows banks to issue stablecoins, provided they are backed by risk-free reserves, opening the door for traditional financial institutions to participate in the regulated digital asset market [1].

According to Citigroup’s Global Head of Partnerships and Innovation, Biswarup Chatterjee, the bank may begin by offering custody services for the high-value collateral supporting stablecoins. These reserves are expected to include U.S. government bonds and cash equivalents, leveraging the bank’s existing expertise in managing large-scale treasury and payment operations for multinational corporations [2]. This move would not only expand Citigroup’s role in safeguarding digital assets but also position the bank as a key player in the rapidly evolving custody market.

The bank has already begun experimenting with blockchain technology to facilitate real-time, tokenized U.S. dollar transfers between its New York, London, and Hong Kong offices. These transfers are available 24/7, in contrast to traditional banking systems that operate within fixed hours. The next step may involve enabling clients to move stablecoins between accounts instantly and convert them into U.S. dollars for same-day settlements [3]. Such innovations could significantly reduce the cost and time associated with cross-border transactions, which are typically slow and cumbersome in the current financial infrastructure.

In parallel, Citigroup is also looking into custody solutions for digital assets tied to cryptocurrency exchange-traded funds (ETFs), including Bitcoin spot products. The bank’s entry into this market could disrupt the current dominance of custodians like Coinbase, which currently holds assets for over 80% of crypto ETF issuers. The approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission has already triggered substantial inflows into crypto-linked investment vehicles, signaling strong demand from institutional investors [4].

The broader context of Citigroup’s digital asset strategy includes modernizing its payment systems and asset management capabilities to remain competitive in a financial landscape increasingly shaped by digital innovation. The bank’s exploration of tokenized deposits and digital settlement options, confirmed by CEO Jane Fraser, further underscores its commitment to integrating blockchain technology into its core operations [5].

While the regulatory environment remains strict—requiring compliance with anti-money laundering laws and KYC measures—Citigroup’s approach highlights the potential for digital assets to coexist with traditional finance in a structured and secure manner. The bank’s actions are part of a growing trend among major financial institutions, including JPMorgan and Fiserv, who are also exploring stablecoin opportunities. As the market matures, Citigroup’s strategic moves may redefine the role of major banks in the digital finance ecosystem [6].

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Source:

[1] Reuters - [Citigroup considers custody and payment services for ...](https://www.reuters.com/business/finance/citigroup-considers-custody-payment-services-stablecoins-crypto-etfs-2025-08-14/)

[2] UEEx - [Citigroup Weighs Stablecoin Custody as U.S. Policy Opens ...](https://blog.ueex.com/citigroup-weighs-stablecoin-custody-as-u-s-policy-opens-new-crypto-market/)

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

[4] Cointelegraph - [Citigroup Weighs Crypto Custody and Payments](https://cointelegraph.com/news/citigroup-crypto-custody-payments-stablecoins-bitcoin-ether-etfs)

[5] Holder.io - [Citigroup Considers Launching Custody Services for ...](https://holder.io/news/citigroup-launching-custody-services-stablecoins-crypto-etfs/)

[6] AInvest - [Citigroup to Enter Crypto Custody and Stablecoin Market ...](https://www.ainvest.com/news/citigroup-enter-crypto-custody-stablecoin-market-industry-shift-2508/)