Citigroup Explores Custody and Payment Services for Stablecoins and Crypto ETFs Amid Regulatory Changes
New York, August 15, 2025 — Citigroup Inc., one of the leading global financial institutions, is actively considering the expansion of its services into the cryptocurrency sector, focusing particularly on stablecoins and crypto exchange-traded funds (ETFs), according to statements made by a senior executive to Reuters. This move reflects a broader shift among traditional financial firms encouraged by recent legislative and regulatory developments in Washington.
Stablecoins Gain Traction Following Congressional Legislation
The increased interest from major banks like Citi follows the passage of a law by the U.S. Congress that establishes a regulatory framework for stablecoins—digital currencies typically pegged to a fiat currency like the U.S. dollar or backed by other secure assets.
The new law mandates that stablecoin issuers maintain reserves comprised of safe assets, such as U.S. Treasury securities or cash equivalents, to fully back the digital tokens. This requirement has created new opportunities for custody banks to provide safekeeping and administrative services for these backing assets, ensuring the stability and integrity of stablecoins in the market.
Citigroup’s Strategic Focus: Custody and Payments
Biswarup Chatterjee, Citigroup’s global head of partnerships and innovation within its services division, told Reuters in an exclusive interview that Citi’s initial priority is to offer custody services for the high-quality assets that back stablecoins. "Providing custody services for those high-quality assets backing stablecoins is the first option we are looking at," he said.
Citi’s services division, which encompasses treasury, cash management, and payment solutions for large corporate clients, remains a crucial component of the bank’s ongoing restructuring efforts. Introducing these crypto-related services could position Citi at the forefront of digital asset adoption among traditional financial firms.
Custody Services for Crypto-Related Investment Products
In addition to stablecoins, Citigroup is exploring custody services for the digital assets underpinning crypto-related investment products, such as ETFs tracking cryptocurrencies like bitcoin. Since the Securities and Exchange Commission (SEC) authorized spot bitcoin ETFs last year, there has been a surge in the popularity of such investment vehicles.
The largest bitcoin ETF, BlackRock’s iShares Bitcoin Trust, currently boasts a market capitalization of around $90 billion. Chatterjee noted, "There needs to be custody of the equivalent amount of digital currency to support these ETFs," highlighting the emerging demand for secure custodial solutions in this space.
Presently, Coinbase dominates ETF custody, serving as custodian for over 80% of crypto ETF issuers, according to a company spokesperson. Citigroup’s entrance could increase competition and offer institutional-grade services to asset managers.
Enhancing Payment Speed with Stablecoins
Beyond custody, Citi is developing capabilities to leverage stablecoins to accelerate payment processing. Traditional international payments can take several days to clear, but stablecoins, operating via blockchain technology, can enable near-instantaneous transfers.
Currently, Citi offers a “tokenized” U.S. dollar payment system that operates continuously to move funds between accounts in New York, London, and Hong Kong. The bank is now working on systems that will allow its clients to send stablecoins directly between accounts or convert them swiftly into dollars for instant payments. Discussions with clients are ongoing to explore practical use cases and applications.
Regulatory Environment and Compliance
While U.S. banking and securities regulators have traditionally been cautious about crypto sector participation by established institutions, the regulatory stance has softened under the current administration, which supports innovation in financial technologies. Nevertheless, Citi and its peers must comply with existing regulations concerning anti-money laundering (AML), currency controls, and operational security.
Chatterjee emphasized that any custody service will rigorously ensure that digital assets have legitimate provenance and will include robust cybersecurity and operational safeguards to prevent theft and misuse.
Considering Issuance of a Stablecoin
Finally, Citigroup is contemplating the possibility of issuing its own stablecoin, a significant step that would mark a deepening involvement in digital assets and payments, aligning the bank with other prominent financial entities exploring proprietary digital currencies.
About the Reporters
Tatiana Bautzer is a U.S. banking correspondent based in New York with extensive experience covering global banking developments and corporate finance. Hannah Lang reports on financial technology and cryptocurrency policy from Washington, D.C., providing in-depth analysis of the fast-evolving digital asset landscape.
As legislative and market forces continue reshaping the cryptocurrency space, Citi’s moves illustrate how established financial institutions are increasingly adopting digital asset services to meet evolving client needs and capture growing market opportunities. This emerging trend signals a potential shift toward mainstream integration of crypto technologies in the financial sector.