tl;dr
Citigroup is considering offering cryptocurrency custody and payment services, focusing initially on custody for high-quality assets backing stablecoins. The bank is also exploring custody options for crypto-linked exchange-traded products (ETPs) like Bitcoin and Ether ETFs, which have seen signific...
Wall Street giant Citigroup is considering offering cryptocurrency custody and payment services to leverage a market strengthened by regulatory approvals from the Trump era and pro-industry legislation. According to Biswarup Chatterjee, a Citigroup executive, the bank’s initial priority will likely focus on providing custody services for “high-quality assets backing stablecoins.” Chatterjee is part of Citigroup’s services division, which handles treasury, payments, cash management, and other solutions for large corporations.
Citigroup is also exploring custody options for crypto-linked exchange-traded products (ETPs), including Bitcoin and Ether exchange-traded funds (ETFs). Chatterjee noted the need for custody of digital currencies to support these ETFs, which have gained popularity since their introduction in early 2024. US spot Bitcoin ETFs now hold nearly 1.3 million BTC, about 6.2% of total circulating supply, with BlackRock’s iShares Bitcoin Trust leading the market with an estimated value of around $88 billion. Ether ETFs, after a slow start, are attracting large inflows, highlighted by BlackRock’s Ethereum fund reaching $10 billion in assets faster than nearly any other ETF in history.
Citigroup’s interest in custody and payments wouldn’t mark its first entry into the crypto space. Earlier this year, the bank partnered with Switzerland’s SIX Digital Exchange to utilize blockchain technology for tokenizing private markets. Since at least 2023, Citi has regarded tokenization as the next major use case in crypto, forecasting a $5 trillion market by 2030. Furthermore, Citi is reportedly among the Wall Street leaders exploring the potential of a joint stablecoin with other major banks like JPMorgan, Wells Fargo, and Bank of America.
A recent report by Ripple, CB Insights, and the UK Centre for Blockchain Technologies identified Citigroup as one of the most active institutional investors in blockchain firms, executing 18 deals between 2020 and 2024. Traditional financial players like Citi have benefited from Trump-era initiatives aimed at regulatory clarity, which have influenced agencies like the US Securities and Exchange Commission and supported legislation such as the US GENIUS Act, a key stablecoin law. Moreover, in July, significant bills including the CLARITY market structure bill, the Anti-CBDC Surveillance State Act, and the GENIUS Act were passed by the House of Representatives, bolstering the regulatory framework for cryptocurrencies.