It was revealed that Citigroup had been considering the possibility of entering the stablecoin business through custody services and related offerings, a development that was interpreted as evidence of how major financial institutions were being influenced by sweeping policy changes in Washington. The disclosure was made by a senior executive, who indicated that opportunities were now opening up for banks due to a new legal framework passed by Congress.
It was noted that Citigroup was not the only institution showing interest in this direction. Other traditional players in the financial sector, including Fiserv and Bank of America, were said to be exploring similar moves into stablecoins, with the aim of capitalizing on their growing acceptance as a medium of payment, settlement, and financial infrastructure. Stablecoins, which are cryptocurrencies pegged to stable assets such as the U.S. dollar, were reported to have become increasingly prominent due to their ability to combine the advantages of digital transfer speed with the stability of fiat-backed value.
The new legislation approved by Congress was reported to require that stablecoin issuers hold safe and high-quality assets—such as U.S. Treasuries or cash reserves—as collateral for their digital coins. This requirement, according to analysts, had created fresh opportunities for custody banks that were capable of safeguarding these reserves. Citigroup was said to be positioning itself to take advantage of this demand.
The global head of partnerships and innovation for Citigroup’s services division, Biswarup Chatterjee, explained that the first option under consideration by the bank was the provision of custody services for the high-quality assets that backed stablecoins. Citigroup’s services division, which encompassed treasury, cash management, payments, and corporate services, was described as a core unit of the bank even as broader restructuring efforts were underway. It was highlighted that digital asset custody could become a natural extension of the existing business model.
A report by McKinsey was cited as having estimated that approximately \$250 billion worth of stablecoins had been issued to date, though most of these were still being used primarily for the settlement of cryptocurrency transactions rather than mainstream financial services. It was further recalled that Citigroup had already disclosed in the previous month that the issuance of its own stablecoin was being considered, but until now the bank had not publicly shared the details of its broader digital asset plans.
In addition to custody for stablecoin reserves, it was stated that Citigroup was also exploring custody solutions for the underlying digital assets that supported crypto-related investment products. For example, exchange-traded funds (ETFs) that tracked the spot price of bitcoin had grown rapidly since the U.S. Securities and Exchange Commission had authorized their issuance. The largest of these, BlackRock’s iShares Bitcoin Trust, was reported to have reached a market capitalization of nearly \$90 billion, creating a demand for custodial services capable of holding equivalent digital currency reserves to back those ETFs.
It was mentioned that Coinbase, a leading cryptocurrency exchange, currently dominated this area, with its custodial arm serving over 80% of issuers of crypto ETFs. However, Citigroup and other traditional banks were believed to be evaluating ways to gain a foothold in that market by offering regulated and institutionally trusted alternatives.
Citigroup’s ambitions were not limited to custodial functions. It was explained that the bank was also looking into the use of stablecoins to accelerate payment systems. Traditional interbank payments often required several days to be completed, but the use of blockchain and stablecoins was thought to provide near-instantaneous settlement. Citigroup was already offering tokenized U.S. dollar payments through its internal blockchain system, enabling real-time transfers between accounts in major financial centers such as New York, London, and Hong Kong. Plans were being made to extend these capabilities, allowing clients to send stablecoins directly between accounts or to convert them seamlessly into U.S. dollars for immediate use. Discussions with corporate clients about these new possibilities were already underway, it was added.
The regulatory landscape was described as having shifted significantly under the administration of U.S. President Donald Trump, whose government was adopting a more open stance toward the cryptocurrency sector compared with previous administrations. Regulators in banking and securities, who had previously been hesitant to allow traditional financial institutions to engage with volatile digital assets, were now said to be more accommodating. This friendlier environment was seen as a key factor encouraging banks such as Citigroup to make concrete moves into the crypto industry.
Nevertheless, it was emphasized that strict compliance would remain necessary. Firms entering this space were expected to adhere to anti-money-laundering protocols, international currency controls, and rigorous due diligence to ensure that digital assets under custody were not linked to illegitimate activities. Chatterjee stated that significant emphasis would have to be placed on cyber security, operational resilience, and the prevention of theft, given the risks associated with digital holdings.
The possibility of Citigroup itself issuing a stablecoin was also said to be under active review, although no timeline or definitive decision had yet been announced. Market observers suggested that if such a move were undertaken, it would mark a historic expansion of the role of traditional banking institutions within the crypto sector, signaling a merging of legacy finance with blockchain-based innovation.
By the conclusion of the discussions, it was evident that Citigroup’s exploration of stablecoin custody and related services reflected not only a reaction to regulatory changes but also a recognition of the profound transformation underway in the global financial system. With trillions of dollars in potential value creation at stake, the bank’s engagement in digital assets was being interpreted as a strategic effort to maintain relevance in an evolving landscape where the lines between traditional finance and cryptocurrency were becoming increasingly blurred.
