TradFi's Blockchain Leap: Citi and Coinbase Redefine Global Payments

Citigroup Inc. and Coinbase Global Inc. are advancing digital asset integration for institutional clients through a partnership aimed at streamlining cross-border payments and fiat-to-stablecoin conversions. The collaboration, announced in late October 2025, marks a strategic pivot for traditional finance (TradFi) as it seeks to leverage blockchain technology to address inefficiencies in global payment systems, according to The Block.

The initiative will initially focus on fiat pay-ins and pay-outs, with Citi supporting Coinbase's on-ramps and off-ramps-services that bridge traditional currency and crypto ecosystems. The banks also plan to explore stablecoin-based payout methods, which could enable faster, 24/7 transactions for Citi's institutional clients, as reported by StreetInsider. "Stablecoins will be another enabler in the digital payment ecosystem," said Citi's Head of Payments and Services, Debopama Sen, emphasizing the potential for programmable, conditional payments and reduced transaction costs, according to Bloomberg.

Coinbase CEO Brian Armstrong highlighted the partnership as a step toward "updating the global financial system," noting that crypto and stablecoins are becoming essential tools for modernizing payments, The Block reported. The collaboration aligns with Coinbase's broader strategy to expand beyond trading, as seen in its recent forays into prediction markets and institutional-grade services, the same report added. Citi, with its global network spanning 94 markets, aims to enhance its "network of networks" approach by integrating Coinbase's infrastructure, StreetInsider noted.

The move reflects a broader trend of traditional institutions adopting blockchain solutions. IBM, for instance, is launching its platform in Q4 2025, offering crypto custody, payments, and DeFi yield access across 40 blockchains. The platform, developed with wallet provider Dfns, underscores growing institutional demand for tokenized assets, including stablecoins and real-world assets (RWAs). Tokenized stocks surged 220% in July 2025, with blockchain addresses holding such assets jumping from 1,600 to over 90,000 in a single month, according to Coinotag.

Meanwhile, Sygnum Bank is pioneering Bitcoin-backed lending with a multisignature custody model that allows borrowers to retain control of collateral. This approach, set to debut in mid-2026, addresses concerns about rehypothecation and aligns with rising demand for transparent, onchain financial products, as reported by TradingView. Other firms, including Cantor Fitzgerald and Coinbase Prime, have also issued Bitcoin-backed loans to mining companies, signaling a broader shift in asset collateralization.

As stablecoin usage for payments grows—surpassing $300 billion in market size—regulators and institutions are grappling with balancing innovation and compliance. Citi's Ronit Ghose projected the stablecoin market could exceed $1 trillion in five years, driven by efficiency gains and cross-border utility, according to Bloomberg. However, challenges remain, including regulatory scrutiny and the need for robust infrastructure to ensure security and compliance, as discussed by Cointelegraph.

The convergence of TradFi and blockchain technology is reshaping financial systems, with partnerships like Citi-Coinbase and IBM's Digital Asset Haven positioning stablecoins and tokenized assets at the forefront of this transformation.