Citigroup Doubles Down on Crypto: Banking Giant Explores Stablecoin Breakthrough

Wall Street's sleeping giant just woke up—and it's hungry for blockchain. Citigroup, the $1.6 trillion behemoth that missed the first crypto wave, is now aggressively pivoting into digital assets with a stablecoin play.

Why stablecoins? Because even dinosaur banks finally get it: the future runs on programmable dollars. While Jamie Dimon was busy ranting about Bitcoin, Citi's quietly building rails for the next financial system.

Here's the kicker—this isn't some exploratory committee. Insiders confirm live testing with institutional partners. The move comes as regulators finally crack open doors that should've been kicked down in 2020.

Will they succeed? Who knows. But watching banks 'innovate' in crypto is like watching your grandpa discover Venmo—painfully slow, but weirdly endearing. One thing's certain: when the suits start moving, the market's about to get interesting.

Citi expands blockchain payments and eyes crypto ETF custody market

Citigroup has been using blockchain technology to transfer tokenized U.S. dollars between its accounts in New York, London, and Hong Kong. Through its Distributed Ledger Technology (DTC) platform, these transfers are available 24/7—unlike traditional banking systems that operate within set hours.

The next step could see customers instantly moving stablecoins from one account to another. Citi is also developing solutions to convert stablecoins into U.S. dollars for same-day settlements. According to Chatterjee, the bank is already discussing practical, real-world use cases for these innovations with clients. The expansion could significantly streamline cross-border payments for companies by cutting costs and removing delays.

In addition, the bank is exploring digital asset custody solutions linked to cryptocurrency exchange-traded funds (ETFs) and other services. The approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission last year prompted several asset managers to launch funds tracking Bitcoin’s price. These ETFs require secure custody of the underlying assets—a space dominated by Coinbase, which holds assets for more than 80% of crypto ETF issuers.

For example, BlackRock’s iShares Bitcoin Trust has a market value of around $90 billion. Citigroup’s entry into the custody arena could intensify competition and reshape the ETF custody market.

Citi eyes stablecoins as regulatory green light spurs big bank crypto moves

Citigroup’s plans come amid a more permissive regulatory environment. That contrasts with the Biden administration, which signaled that legacy financial companies are relatively agnostic about jumping into crypto.

The GENIUS Act created clarity and new definitions that industry insiders say will prompt major institutions to enter the game. Still, compliance will be strict. Banks must comply with anti-money-laundering laws and KYC measures and undergo the necessary checks to ensure all cryptoassets involved are clean from nefarious activities.

Security and fraud prevention will be essential to gain trust in this new market. While Citi has yet to make an official announcement, it is reportedly exploring its stablecoin offering. That would put it in good company with banks like JPMorgan, which has its own JPM Coin for institutional payments.

Just recently, Citi CEO Jane Fraser confirmed that the bank is exploring tokenized deposits and digital settlement options.

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