Citigroup Inc. is considering offering custody and related services for stablecoins, the bank stated, as recent U.S. legislation opens the door for traditional financial institutions to expand into cryptocurrency operations.
The move follows a new law passed by Congress requiring stablecoin issuers to hold safe assets such as U.S. Treasuries or cash to back the digital tokens, creating potential opportunities for banks to provide secure storage and administration of those reserves.
Biswarup Chatterjee, global head of partnerships and innovation for Citi’s services division, noted that stablecoin custody is the “first option” the bank is examining. Citi’s services unit — which handles treasury, cash management, payments, and related offerings for corporate clients — remains a key business line as the bank undergoes a major restructuring.
Growing Interest from Traditional Banks
Citigroup is among several established U.S. financial firms, including Fiserv and Bank of America, exploring entry into the stablecoin market. Stablecoins are cryptocurrencies pegged to a fiat currency or other assets, typically the U.S. dollar, and have largely been used for settling cryptocurrency trades.
An estimated $250 billion worth of stablecoins have been issued to date, according to a McKinsey & Co. study. The new legislation aims to broaden their use for payments, settlements, and other financial transactions.
While Citi disclosed last month it was assessing the possibility of launching its own stablecoin, it has not previously outlined wider plans for digital asset services. The bank is also looking at custody solutions for digital assets linked to crypto-based investment products, such as exchange-traded funds (ETFs) that track the spot price of bitcoin.
