Citigroup Explores Stablecoin and Crypto ETF Services

Citigroup is preparing to enter the custody business for stablecoins and cryptocurrency-linked exchange-traded funds, a move that could significantly reshape the competitive landscape. By doing so, the bank positions itself as a serious challenger to dominant players such as Coinbase, marking a decisive step in its broader digital asset expansion strategy.

Regulatory Tailwinds Driving Citi’s Entry

As the third-largest bank in the United States by assets, Citigroup is considering offering secure storage for the high-quality assets that back stablecoins. This strategic move follows recent federal legislation that has opened new pathways for traditional banks to participate in digital asset markets. The regulatory clarity is providing a foundation for institutions like Citi to enter a space that was once dominated by fintechs and crypto-native firms.

According to Biswarup Chatterjee, Citigroup's Global Head of Partnerships and Innovation, "providing custody services for those high-quality assets backing stablecoins is the first option we are looking at."

Traditional Finance Aligns with Crypto Evolution

Citigroup’s interest reflects a broader trend among established financial institutions. Regulatory changes initiated under the Trump administration, and formalized through congressional action, have created fertile ground for stablecoin adoption. With the passage of the GENIUS Act in July, issuers are now required to back stablecoins with safe, liquid assets such as U.S. Treasuries or cash. This framework has encouraged banks like Fiserv, Bank of America, and now Citi to seriously explore the stablecoin market.

Expanding Custody to Bitcoin ETFs and Beyond

Alongside stablecoins, Citigroup is evaluating custody solutions for digital assets tied to crypto investment products, particularly Bitcoin ETFs. The momentum in this market has been undeniable, with BlackRock’s iShares Bitcoin Trust alone amassing around $86 billion in assets under management. The scale of these products underscores the potential for Citi to tap into a lucrative custody business, directly challenging Coinbase’s entrenched role in safeguarding institutional crypto assets.

Citi’s Blockchain Payments and Tokenization Ambitions

The bank’s exploration of custody services is part of a larger effort to integrate blockchain technology into its operations. Citigroup is already piloting tokenized U.S. dollar payments, enabling clients to move funds seamlessly across key global financial hubs such as New York, London, and Hong Kong. Looking ahead, Citi intends to extend these services further, offering the ability to transfer stablecoins across accounts or instantly convert them into dollars, an innovation that could transform settlement efficiency in cross-border payments.