Citigroup to Enter Crypto Custody and Stablecoin Market Amid Industry Shift

Citigroup, one of the world’s largest financial institutions, is preparing to enter the crypto custody and stablecoin market, signaling a significant shift toward digital assets in its broader strategy to modernize payment systems and asset management [1]. The move comes amid a more favorable regulatory environment under the Trump administration, which has been more open to crypto-related innovations.

Biswarup Chatterjee, who leads partnerships and innovation for Citigroup’s services division, indicated that the bank’s initial focus would likely be on safeguarding the reserve assets that back high-quality stablecoins [1]. The bank is also exploring how to store assets for crypto ETFs, including products tied to Bitcoin and Ethereum, a segment where Coinbase currently holds a dominant position [1]. This development underscores the growing demand for secure custody solutions, especially as major funds like BlackRock’s IBIT have already amassed over $90 billion in assets under management [1].

The bank is also looking to expand its existing tokenized U.S. dollar payment infrastructure to support stablecoin-based transfers [1]. This would allow clients to move funds instantly or convert stablecoins into fiat currency on demand, significantly reducing settlement times compared to traditional bank transfers that often take days [1].

Chatterjee emphasized that any foray into crypto custody would be accompanied by rigorous due diligence and enhanced cybersecurity measures to ensure asset legitimacy and protect holdings [1]. This cautious approach aligns with Citigroup’s broader risk management philosophy and reflects the increased scrutiny that digital asset operations face.

The bank’s interest in stablecoin and crypto custody mirrors a wider industry trend. JPMorgan and PNC Bank have strengthened their relationships with Coinbase for crypto services, while BNY Mellon has partnered with Ripple to safeguard reserves for its RLUSD stablecoin [1]. These moves highlight a growing recognition among major financial institutions of the potential in the crypto space.

For Citigroup, entering the crypto custody and stablecoin market could offer a strategic advantage in attracting both institutional and retail capital, as digital assets continue to gain traction in mainstream finance [1]. The initiative represents a calculated step in a rapidly evolving landscape, where traditional banks are increasingly adapting to technological and regulatory changes to remain competitive.

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[1] Banking Giant Citigroup Prepares to Enter Crypto Custody and Stablecoin Market. https://coinmarketcap.com/community/articles/689e8b3035c5a13926ae12b6/