Bitcoin News Today: Citigroup Eyes Crypto Custody and Stablecoin Services Amid ETF Surge

Citigroup is considering the expansion of its financial services to include cryptocurrency custody and payment solutions, particularly for stablecoins and crypto-related exchange-traded products (ETPs). The bank is evaluating infrastructure to support the growing demand for crypto ETFs, which have seen substantial investor interest since their launch in early 2024. A Citigroup executive has emphasized that the firm’s focus will be on high-quality assets that back stablecoins, reflecting a strategic and cautious approach to entering the digital asset space [1].

The firm is also exploring the potential to offer custody services for ETPs tied to cryptocurrencies such as Bitcoin (BTC) and Ether (ETH), which require the equivalent amount of digital currencies to be held in reserve. This aligns with the bank’s broader interest in blockchain and tokenization, a trend it views as a potential $5 trillion market by 2030. Citigroup has previously partnered with Switzerland’s SIX Digital Exchange to enhance private markets through tokenization and is also engaging with other Wall Street institutions to explore the issuance of a joint stablecoin [2].

BlackRock’s iShares Bitcoin Trust (IBIT), currently the largest Bitcoin ETF with nearly $88 billion in assets under management, exemplifies the growing institutional interest in digital assets. While Ether ETFs have lagged initially, they have recently seen a surge, with BlackRock’s Ethereum fund becoming the third fastest to reach $10 billion in assets under management [3].

Citigroup’s move into crypto custody and payments follows earlier forays into the space, including blockchain-based initiatives aimed at improving global transaction efficiency. The bank sees the potential for stablecoins to reduce international settlement times from days to seconds, offering a competitive edge in cross-border trade. This aligns with a broader industry trend where traditional financial institutions are adapting to meet the demands of a digital-first investor base [4].

The U.S. regulatory environment has also played a role in Citigroup’s strategy, with recent legislative developments such as the CLARITY Market Structure Act and the GENIUS Act providing a more favorable framework for crypto innovation. The bank is likely to proceed cautiously, ensuring that any new services are implemented only after thorough risk assessments and regulatory clarity [5].

As one of the most active institutional investors in blockchain technologies, Citigroup has completed 18 deals in the space between 2020 and 2024. The firm’s engagement with digital assets reflects its commitment to staying at the forefront of financial innovation while maintaining its reputation for stability and trust. Its approach to crypto custody and ETF infrastructure may set a precedent for other global institutions, further integrating digital assets into mainstream finance [6].

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Sources:

[1] Bitcoinist.com (https://bitcoinist.com/citigroup-confirms-plans-to-offer-stablecoin/)

[2] AInvest (https://www.ainvest.com/news/bitcoin-news-today-citigroup-explores-stablecoin-custody-crypto-etf-infrastructure-growth-2508/)

[3] The Business Times (https://www.businesstimes.com.sg/companies-markets/banking-finance/citigroup-considers-custody-and-payment-services-stablecoins-crypto-etfs)

[4] CoinGape (https://coingape.com/citigroup-considers-custody-services-for-crypto-etfs-and-stablecoins/)

[5] Coinspeaker (https://www.coinspeaker.com/citigroup-weighs-stablecoin-crypto-etf-custody-amid-upbeat-us-regulations/)

[6] Intellectia (https://intellectia.ai/news/stock/citis-crypto-custody-gambit-puts-blockchain-etfs-in-the-spotlight)