Citigroup Explores Custody and Payment Services for Stablecoins and Crypto ETFs Amid Regulatory Changes
New York, August 15, 2025 — Citigroup is actively exploring new opportunities in the cryptocurrency sector, particularly focusing on providing custody and payment services for stablecoins and crypto exchange-traded funds (ETFs). This move reflects a broader shift among traditional financial institutions responding to recent regulatory developments in the United States that have opened the doors for more extensive participation in digital asset markets.
A recent interview with Biswarup Chatterjee, Citigroup’s global head of partnerships and innovation in its services division, revealed that the bank is considering custody solutions for high-quality assets backing stablecoins, such as U.S. Treasuries and cash. These assets are mandated by new legislation passed by Congress, which requires issuers of stablecoins—cryptocurrencies pegged to fiat currencies like the U.S. dollar—to hold secure assets as collateral. This regulation aims to bolster the credibility and stability of stablecoins, effectively positioning them for widespread use in payments, settlements, and other financial services.
"We are looking at providing custody services for those high-quality assets backing stablecoins as a starting point," Chatterjee said. Citigroup’s services unit—which includes treasury, cash management, and payments—remains central to the bank’s operations even as it undergoes organizational restructuring.
The passage of this law has intensified interest from prominent traditional banks, including Bank of America and payment technology firm Fiserv, in stablecoin issuance and service provision. A recent McKinsey study estimates that approximately $250 billion in stablecoins have already been issued, although their predominant use remains the settlement of cryptocurrency trades.
Beyond stablecoins, Citigroup is considering custody solutions for digital assets linked to crypto-related investment products such as bitcoin ETFs. Since the U.S. Securities and Exchange Commission authorized such ETFs last year, asset managers have launched numerous products tracking the spot price of bitcoin. The largest among them, BlackRock’s iShares Bitcoin Trust, has a market capitalization nearing $90 billion. Custodians are required to hold an equivalent amount of digital currency to underpin these funds. Currently, Coinbase dominates this niche, serving as custodian for more than 80% of crypto ETF issuers.
In an effort to enhance transaction speed and efficiency, Citigroup is also exploring the utilization of stablecoins to accelerate payments. Traditional banking payment systems often take several days to process cross-border transactions. Citi currently offers "tokenized" U.S. dollar payments using blockchain networks for transfers 24/7 between major financial centers such as New York, London, and Hong Kong. Plans are underway to enable clients to send stablecoins between accounts or convert stablecoins to U.S. dollars for instant payments. Chatterjee noted that the bank is actively engaging with clients to develop practical use cases for these services.
The evolving regulatory environment under the current U.S. administration, which has adopted a relatively more permissive stance on cryptocurrencies compared to previous administrations, has encouraged banks like Citigroup to explore these digital asset avenues. Nonetheless, compliance with existing rules on money laundering, currency controls, and cyber security remains a priority. Chatterjee emphasized the importance of ensuring that crypto assets held for custody have legitimate origins and that robust security protocols are in place to prevent theft or loss.
Citigroup is also considering the issuance of its own stablecoin, although details remain under discussion.
As major financial institutions like Citigroup deepen their engagement with digital assets, the integration of cryptocurrencies into mainstream finance appears poised to accelerate, influenced by both regulatory shifts and evolving market demand.
Reporting by Tatiana Bautzer and Hannah Lang; Editing by Lananh Nguyen, Michelle Price, Rod Nickel