Citigroup is actively evaluating opportunities to provide cryptocurrency custody and payment services, primarily focusing on assets backed by stablecoins. This initiative aims to leverage the momentum gained from recent regulatory approvals and favorable legislation that support the crypto industry.
Biswarup Chatterjee, an executive at Citigroup, stated that their priority will be offering custody services for high-quality assets that back stablecoins. Chatterjee operates within Citigroup’s services division, which oversees treasury, payments, cash management, and other enterprise solutions for major corporations.
Additionally, the bank is considering custody solutions for exchange-traded products (ETPs) linked to cryptocurrencies, including Bitcoin (BTC) and Ether (ETH) ETFs. Chatterjee noted the importance of having custody over the equivalent amount of digital currencies to support these ETFs.
Bitcoin ETFs have seen a significant rise in demand since their launch in early 2024. Research from Bitbo reveals that the twelve US spot Bitcoin ETF issuers currently hold nearly 1.3 million BTC, representing about 6.2% of Bitcoin’s total circulating supply. BlackRock’s iShares Bitcoin Trust (IBIT) stands as the largest, with a market value close to $88 billion.
While Ether ETFs started more slowly, they have recently experienced a surge, with BlackRock’s Ethereum fund achieving the distinction of being the third fastest to amass $10 billion in assets historically.
Citigroup’s moves into crypto custody and payments follow earlier ventures into the cryptocurrency space. The bank partnered with Switzerland’s SIX Digital Exchange earlier this year to utilize blockchain technology for enhancing private markets through tokenization.
Since 2023, Citi has recognized tokenization as a major future driver in cryptocurrency, forecasting it could evolve into a $5 trillion market by 2030. Citi has also collaborated with other Wall Street leaders like JPMorgan, Wells Fargo, and Bank of America to explore the issuance of a combined stablecoin.
A joint report by Ripple, CB Insights, and the UK Centre for Blockchain Technologies highlights Citigroup as one of the most active institutional investors in blockchain technologies, completing 18 deals between 2020 and 2024.
Traditional financial institutions like Citigroup have been encouraged by regulatory clarity provided during the Trump administration, with ongoing efforts involving the US Securities and Exchange Commission and significant legislation like the US GENIUS Act, which governs stablecoins.
In July, the US House of Representatives passed several critical bills to support crypto markets including the CLARITY market structure bill, the Anti-CBDC Surveillance State Act, and the GENIUS Act.
