According to a Reuters report, a senior executive at the bank confirmed that they are exploring the possibility of offering custody services for stablecoins and other services. Biswarup Chatterjee, global head of partnerships and innovation for the bank's services division, stated that the first option they are considering is to offer custody services for high-quality assets that back stablecoins.
Additionally, Citigroup is also exploring custody services for cryptocurrency ETFs, including those for Bitcoin and Ethereum. The bank seeks to take on a role similar to that which Coinbase currently offers to approximately 80% of existing cryptocurrency ETFs in the U.S.
Chatterjee noted that the largest Bitcoin ETF, BlackRock's IBIT, currently has over $90 billion in assets under management. In this regard, he pointed out that it is necessary to hold an equivalent amount of digital currency to back these ETFs.
This development with Citigroup once again underscores the growing interest in the cryptocurrency sector among traditional finance (TradFi) giants. JPMorgan and PNC Bank reached agreements last month with Coinbase to offer cryptocurrency services to their clients. Meanwhile, JPMorgan plans to offer crypto-backed loans.
According to the report, Citigroup is also exploring the use of stablecoins to process payments more quickly, considering that traditional banking processes take several days. It was previously reported that the bank was considering issuing its stablecoin, similar to JPMorgan and Bank of America.
It is worth noting that the banking giant already offers tokenized payments in US dollars that facilitate the transfer of currency between accounts globally via the blockchain network. Chatterjee revealed that they are developing services that allow customers to send stablecoins between accounts or convert them to fiat currency for instant payments.
Meanwhile, Citigroup's executive group stated that when providing cryptocurrency custody services, they must ensure that these crypto assets, prior to acquisition, are used for legitimate purposes. They also aim to reinforce cybersecurity and operational security to prevent theft and ensure custody.
Some banking giants also offer cryptocurrency custody services for stablecoins. Last month, Ripple partnered with BNY Mellon for the bank to custody the dollar reserves of its stablecoin RLUSD.
