Citigroup Doubles Down on Stablecoin Domination – Banking Giant Charges Into Crypto Payments

Wall Street's sleeping giant just woke up hungry. Citigroup fired the latest shot in the banking sector's crypto arms race today, unveiling ambitious plans to develop its own stablecoin infrastructure.

The move positions Citi as the first major US bank to publicly challenge Tether's stranglehold on dollar-pegged digital payments. Insiders whisper the project could launch as early as Q1 2026—assuming regulators don't do what they do best: move at glacial speeds while collecting consulting fees.

Why now? The bank's blockchain lead cited 'client demand for instant, borderless settlements'—Wall Street code for 'we're tired of losing deals to crypto-native firms.'

This isn't some half-baked experiment. Citi's reportedly allocated nine figures to build a compliant, institutional-grade payment rail that could eventually process trillions—if they can navigate the regulatory minefield without triggering another congressional hearing about 'banking's dangerous crypto addiction.'

Citigroup Considers Stablecoin Issuance

The proposed Citi stablecoin could convert traditional customer deposits into blockchain-based representations, facilitating instantaneous and round-the-clock transactions. According to Fraser, the bank could directly control the issuance of US dollar-pegged stablecoins while improving reserve transparency. Additionally, Citigroup plans to offer custodial services for clients and settle transactions on the blockchain without waiting for consensus.

Citigroup’s initiative is comparable to JPMorgan’s MOVE with its JPM Coin, which targets limited user groups, and the DTCC’s stablecoin project. However, Fraser emphasized that Citigroup is prioritizing regulatory compliance and risk management for tokenized deposits. The bank aims for seamless integration into the global payment network, aligning with new stablecoin regulations crafted by U.S. authorities.

Wall Street’s Race to Capture Growing Market Share

Major Wall Street institutions, including Citigroup, are accelerating efforts to support US dollar-backed stablecoins. JPMorgan has been testing its JPMD coin on the Base network, and DTCC’s stablecoin plans have intensified institutional competition within the sector. The GENIUS Act, passed by the Senate and pending in the House of Representatives, is expected to provide a legal foundation for this competition.

Geoffrey Kendrick, Head of Digital Asset Research at Standard Chartered, reported that stablecoins have been a prevalent topic in discussions across Washington, New York, and Boston. Kendrick predicts that if the stablecoin market, currently valued at $257 billion, reaches $750 billion by the end of 2026, it could begin to influence traditional financial assets and policies. Citigroup’s research similarly indicates that the growth of the US dollar-pegged stablecoin market could reshape the banking ecosystem.