Citi's Stablecoin Move: Regulated Digital Dollars Redefine Banking

Citi Ventures, the venture capital arm of Citigroup, has invested in BVNK, a stablecoin infrastructure firm, as major U.S. banks deepen their engagement with digital assets. BVNK's technology functions as a global payments rail, enabling seamless conversions between fiat currencies and stablecoins, which are digital assets pegged to traditional currencies like the U.S. dollar. The investment, though the exact amount and valuation remain undisclosed, follows BVNK's previous backing by Visa, Coinbase, and Tiger Global. Co-founder Chris Harmse noted the company's valuation now exceeds $750 million, up from its last publicly disclosed funding round .

Stablecoins have gained traction as a tool for cross-border transactions, with nearly $9 trillion in transactions recorded over the past 12 months, according to Visa data. The sector's growth is being fueled by regulatory clarity, particularly the passage of the U.S. GENIUS Act, which provides a framework for stablecoin issuance and oversight. The law, signed into law in July 2025, allows insured depository institutions and approved non-bank entities to issue stablecoins backed by 1:1 reserves of high-quality assets, such as U.S. Treasuries. This legislative shift has emboldened banks to explore stablecoin initiatives, with Citi joining peers like JPMorgan Chase, which launched its own stablecoin-like token, JPMD, and HSBC, which offers tokenized deposit services .

Citi's strategic pivot into stablecoins aligns with broader industry trends. In July 2025, CEO Jane Fraser confirmed the bank is evaluating the issuance of its own stablecoin and expanding custodial services for crypto assets. The bank also revised its stablecoin market forecasts, projecting a base-case market cap of $1.9 trillion and a bull-case of $4 trillion by 2030, up from prior estimates of $1.6 trillion and $3.7 trillion, respectively . These projections reflect the sector's rapid adoption, driven by its potential to streamline cross-border payments and reduce costs compared to traditional systems.

The investment in BVNK underscores the competitive landscape of stablecoin infrastructure. BVNK competes with firms like Alchemy Pay and Ripple, all vying to capture a share of the cross-border payment market. The company's expansion in the U.S., including 50-state coverage and new offices in San Francisco and New York City, positions it to capitalize on the country's growing appetite for digital assets. Harmse emphasized that the GENIUS Act has spurred institutional confidence, enabling companies to build on stablecoin infrastructure .

Globally, regulatory frameworks are evolving to accommodate stablecoins. The European Union's Markets in Crypto-Assets Regulation (MiCA) and Hong Kong's Stablecoin Ordinance, both introduced in late 2024 and 2025, respectively, aim to create oversight for stablecoin issuance and reserves. However, the U.S. remains a key driver of innovation, with the GENIUS Act's emphasis on federal and state-level oversight fostering a competitive yet regulated environment. This has attracted foreign issuers seeking access to the U.S. market, provided they meet comparable regulatory standards .

Citi's move into stablecoins reflects a broader industry transformation. While skeptics warn of disintermediation, Citi analysts argue that stablecoins are not replacing traditional banking but reimagining it. Tokenized deposits and bank-issued stablecoins are seen as complementary to existing systems, offering faster settlements and programmable financial tools for corporations. With stablecoin transaction volumes already surpassing those of traditional payment networks like Visa and Mastercard, the sector's role in reshaping global finance is becoming increasingly evident .