Main Points:
- Citi exploring custody services for high-quality assets backing stablecoins and crypto ETFs
- Bank considering issuance of its own stablecoin and expanding tokenized payment systems
- Regulatory shifts (e.g. GENIUS Act) are enabling major traditional financial institutions to enter the crypto space
- Tokenization and stablecoins have potential for trillions in future market value
- Citi has prior blockchain experience via tokenization partnerships and investments in startups
1. Citi’s Entry into Crypto Custody: What’s on the Table?
Citigroup is actively evaluating a suite of cryptocurrency-related services that mark a significant shift for a global banking heavyweight. According to Reuters, the bank’s initial focus is on offering custody services for high‑quality assets backing stablecoins, such as U.S. Treasuries and cash. This opportunity has emerged due to new U.S. legislation requiring stablecoin issuers to hold safe asset reserves—perfectly aligned with traditional banks’ custody strengths.
Moreover, Citi is exploring custody for digital assets linked to exchange-traded funds (ETFs), including Bitcoin (BTC) and Ethereum (ETH) spot ETFs. As ETF demand increases, so does the need for robust custody infrastructure for the underlying crypto tokens.
2. Payments on the Fast Track: Tokenized Dollars and Stablecoins
Beyond custody, Citi is considering using stablecoins to accelerate payments—especially cross-border settlements, which now typically take several days. Currently, Citi offers “tokenized” U.S. dollar transfers between major financial centers (New York, London, Hong Kong) around the clock. Moving forward, the bank plans services enabling customers to send stablecoins between accounts or convert them to dollars for near-instantaneous payments.
3. A Bank Coin on the Horizon?
Citi’s ambition extends even further: CEO Jane Fraser has publicly indicated that the bank is considering issuing its own stablecoin, alongside exploring tokenized deposit offerings and reserve management services. This could deeply impact corporate cross-border payments and internal liquidity solutions.
4. The Regulatory Tailwind: GENIUS Act and Legislative Shifts
These strategic moves are enabled by a more supportive regulatory environment. The GENIUS Act, passed by the U.S. Congress, provides the first federal framework for stablecoins, requiring appropriate backing and compliance measures. This law, together with Trump-era regulatory clarity and favorable commentary from the SEC, has encouraged banks like Citi to diversify into crypto-related services.
5. The Bigger Picture: Stablecoins, Tokenization, and Institutional Momentum
- Stablecoin Market Growth
A recent Citi report forecasts that the stablecoin market could quintuple in the coming five years, possibly reaching US$4 trillion, driven by use cases such as hedging, payments, and cash management. - Tokenization Trends
Tokenization — converting assets (stocks, bonds, real estate) into blockchain-based tokens — is gaining serious traction. Analysts predict tokenized markets could expand from US$256 billion to US$2 trillion by 2028. Citi, along with major institutions like Bank of America and BlackRock, is deeply involved in exploring this space. - Institutional Strategy Comparisons
Around the same time, several leading financial firms have announced active explorations in the crypto domain:- JPMorgan has engaged with deposit tokens and stablecoins.
- Goldman Sachs and Morgan Stanley are assessing internal stablecoin opportunities.
- Bank of America plans to issue its own stablecoin.
6. Citi’s Blockchain Track Record
Citi’s current interest in crypto custody and payments is not a sudden pivot. The bank has been engaged in blockchain initiatives for years:
- Tokenization Partnerships: Earlier in 2025, Citi collaborated with Switzerland’s SIX Digital Exchange to apply tokenization to private markets and explore blockchain-based asset servicing.
- Strategic Investments: From 2020 to 2024, Citi invested in 18 blockchain startup ventures, making it one of the most active institutional investors in the emerging blockchain ecosystem.
- Vision for Tokenized Markets: As early as 2023, Citi anticipated tokenization as the next “killer use case” in crypto, estimating a potential US$5 trillion market by 2030.
Visual Aid Suggestion
To assist readers, an infographic illustrating the interplay among stakeholders—Citi’s role, ETFs, stablecoins, legislation, tokenization, and payments—would be highly effective. For example, a flowchart showing:
- U.S. legislation → Stablecoin demand
- Citi’s custody + payments infrastructure
- Tokenization growth projections
- Competitive landscape (e.g., Coinbase, other banks)
7. Summary of Developments (Bullet Recap)
- Citi is evaluating custody services for stablecoin reserves and digital assets underlying ETFs.
- The bank plans to expand its tokenized dollar payment platform to include stablecoin transfers and conversions.
- Issuance of a proprietary Citi stablecoin is under consideration, with a focus on tokenized deposits and reserve management.
- U.S. regulatory clarity (especially the GENIUS Act) is enabling financial institutions to enter crypto services.
- The stablecoin market is projected to grow sharply, possibly reaching US$4 trillion, while tokenization could unlock trillions more.
- Citi has a strong foundation in blockchain, through prior tokenization initiatives and startup investments.
Conclusion
Citi’s push into crypto services represents a pivotal moment in mainstream financialization of digital assets. By leveraging its capabilities in custody, payments, and compliance, the bank is positioning itself to operate at the intersection of stablecoins, ETFs, tokenization, and blockchain innovation. With regulatory headwinds turning into tailwinds and digital asset markets rapidly expanding, Citi’s moves could catalyze broader institutional adoption.
