Citigroup Eyes Stablecoin Services as US Policy Develops: Reuters

The US bank joins peers including Fiserv and Bank of America that are also weighing an entry into stablecoin services. Citigroup currently has $2.5 trillion in assets under management, according to the company’s official postings. 

Regulatory stimulus

Passage of the GENIUS Act from the US Congress, which will allow stablecoins to be more widely used for payments, settlements and financial services has prompted a growing number of banks and asset managers to explore digital assets. The law is one of several legislative and regulatory actions aimed at helping the US to become “the crypto capital of the world” in a global competition to regulate and mainstream crypto in a reassuring way for consumers and traditional financial institutions.

Custody services

GENIUS requires stablecoin issuers to hold “safe” assets such as Treasuries or cash, opening opportunities for custody banks, like Citigroup, to administer those reserves. Stablecoin issuers must maintain, in theory, an equal amount of safe assets relative to the number of stablecoins issued.

“Providing custody services for those high-quality assets backing stablecoins is the first option we are looking at,” Biswarup Chatterjee, Citi’s global head of partnerships and innovation for its services division told Reuters.

ETFs

Citigroup is also evaluating custody for digital assets that make up crypto-related investment products, including bitcoin ETFs. The largest bitcoin ETF, BlackRock’s iShares Bitcoin Trust, has net assets of almost $90 billion.

Beyond custody, Citi is testing ways to use stable coins for faster cross-border payments. The bank already offers “tokenized” US dollar transfers between accounts in New York, London, and Hong Kong 24/7, and is developing services enabling clients to send stablecoins between accounts or convert them into dollars for instant settlement.

Citigroup has also said it’s considering issuing its own stable coin.