Citigroup Plans Stablecoin Issuance for Digital Finance Expansion

Citigroup, the third-largest bank in the US, has announced its plans to enhance its digital asset capabilities and offerings. During the second quarter earnings call of 2025, CEO Jane Fraser highlighted the bank's intentions to issue its own stablecoin and provide custody services for crypto assets. Fraser emphasized that stablecoins represent the "next evolution in the broader digitization of payments, financing, and liquidity."

Fraser outlined four key areas of exploration for Citigroup: reserve management for stablecoins, on and off ramps from cash and coin, the issuance of a Citi stablecoin, and tokenized deposit space. She noted that the bank is particularly active in the tokenized deposit space and is looking to provide custodial solutions for crypto assets. Fraser believes this move presents a significant opportunity for Citigroup to leverage its strengths in the digital finance sector.

The potential stablecoin from Citigroup is expected to offer a cost advantage for making payments. Currently, stablecoins are primarily used to settle crypto trades, with only a small percentage used for payments. Traditional offerings incur high transaction costs, making them prohibitive for widespread use. Citigroup's Citi Token Services aims to enable clients to move from physical fiat to digital and back again without incurring these transaction costs, thereby making the process more efficient and cost-effective.

Citigroup's entry into the stablecoin market aligns with broader industry trends, as other major banks also explore digital finance solutions. The bank's focus on tokenized deposits and custody services for cryptocurrencies reflects its commitment to staying at the forefront of digital finance innovation. By issuing its own stablecoin and offering comprehensive crypto asset custody solutions, Citigroup aims to strengthen its position in the rapidly evolving digital finance landscape.