- Citigroup is exploring custody for assets backing stablecoins and crypto ETFs.
- The bank is testing tokenised dollar and stablecoin payment options for clients.
Citigroup is weighing new services spanning custody of stablecoin reserves and digital assets linked to crypto exchange traded funds, alongside trials of stablecoin payment flows for corporate clients.
Citi evaluates custody of reserves backing stablecoins and ETF-linked assets
The bank is assessing whether to safeguard the high-quality reserves that issuers must now hold against dollar-pegged tokens, notably U.S. Treasuries and cash.
That requirement follows a federal law setting out a framework for stablecoins, which has prompted large companies and financial institutions to revisit issuance and support functions.
Executives are also examining custody for digital assets associated with crypto investment products. Since U.S. regulators authorised spot bitcoin ETFs, managers have needed institutional-grade custody arrangements for the underlying assets used to support those products.
Coinbase currently serves a large majority of ETF issuers, while BlackRock’s iShares Bitcoin Trust has grown to roughly $90 billion in market capitalisation, illustrating the scale of assets now requiring safekeeping.
Citigroup’s discussions reflect a broader shift by incumbents into tokenised finance. A McKinsey estimate puts outstanding stablecoins at about $250 billion, largely used today for crypto trade settlement rather than everyday commerce, underscoring the potential for banks to intermediate reserves and expand into mainstream payment use cases.
Bank tests tokenised dollar rails and stablecoin conversions for faster settlement
Alongside custody, the bank is developing tools to let clients move stablecoins between accounts or convert them rapidly to dollars for instant payments.
Citi already operates tokenised dollar transfers around the clock between internal accounts in New York, London and Hong Kong, and is speaking with clients about how these rails could cut processing times and improve cash management.
Compliance and operational controls remain central to any roll-out. Cross-border stablecoin activity must satisfy anti-money-laundering checks and currency-control regimes, and custody must ensure robust cyber and operational safeguards against theft and misuse.
These requirements shape product design and determine where and how the services can be offered to institutions.
Citigroup has also indicated that an in-house stablecoin is under consideration as part of its digital payments roadmap, extending earlier work in tokenised deposits. Management signalled last month that issuance is being evaluated, which would complement custody and payments functionality if the programme advances.
The competitive landscape is developing as banks weigh technology choices and regulatory clarity. Some institutions are studying whether to support third-party stablecoins or build their own tokens, and whether to transact on public networks or permissioned ledgers.
Recent policy moves in Washington have accelerated board-level discussions on these topics across financial services and big corporates.
Bitcoin is trading at $119,168.00 USD, representing an exact decline of $2,673.00, which equates to about –2.19% from the previous close. Its intraday high was $122,015.00, and its intraday low was $117,449.00.
