Citigroup Considers Offering Cryptocurrency Custody and Payment Services
Recently, Citigroup announced that it is evaluating the provision of cryptocurrency custody and payment services, with initial trials focusing on the reserve assets backing stablecoins. This initiative is part of Citigroup’s effort to expand its digital asset business.
Expanding Custody Services for Stablecoin-Linked Assets and Potential Issuance of Stablecoins
According to reports, Biswarup Chatterjee, a senior executive at Citigroup, stated in an interview that the initial business direction being considered by Citigroup is to provide custody services for high-quality assets backing stablecoins, such as U.S. Treasury bonds and cash.
Chatterjee is part of Citigroup’s Corporate Services division, which is responsible for cash flow, payment, and treasury management services for large corporations. He mentioned that in addition to considering custody services, they are also assessing the possibility of issuing their own stablecoin.
Citigroup Also Considering Cryptocurrency ETF Custody
Furthermore, Chatterjee revealed that Citigroup may also offer custody services for cryptocurrency ETFs, including products like Bitcoin (BTC) and Ethereum (ETH).
Since the launch of the first Bitcoin spot ETFs in the U.S. in early 2024, there has been a strong market response. Data shows that the current twelve Bitcoin spot ETFs in the U.S. collectively hold approximately 130 BTC, accounting for about 6.2% of the total Bitcoin supply.
The largest among them is BlackRock’s Bitcoin spot ETF (IBIT), with a market value of around $88.6 billion. Although Ethereum ETFs started slower, there has been a rapid influx of funds recently, with BlackRock’s Ethereum ETF (ETHA) becoming the third fastest ETF to surpass $10 billion in assets.
Partnering with Swiss Exchange to Enter the Asset Tokenization Market
In fact, this is not Citigroup’s first foray into the cryptocurrency asset market. As early as 2023, Citigroup’s report indicated that “asset tokenization” would be the next killer application in the cryptocurrency industry, with the market size expected to reach $5 trillion by 2030.
In early 2024, Citigroup also collaborated with Switzerland’s SIX Digital Exchange to tokenize “pre-IPO” equity on the blockchain, with the project expected to officially launch in the third quarter of 2025, further realizing asset tokenization.
One of the Most Proactive Traditional Financial Institutions in Web 3
In addition to custody and tokenization, Citigroup has also discussed the possibility of issuing a joint stablecoin with traditional banking giants such as JPMorgan, Wells Fargo, and Bank of America.
Moreover, a joint report by Ripple, New York data analytics firm CB Insights, and the UK Blockchain Technology Centre indicated that Citigroup participated in 18 blockchain company investments between 2020 and 2024, making it one of the most active blockchain investors among traditional financial institutions.
Risk Warning
Investing in cryptocurrencies carries a high level of risk, with prices potentially experiencing significant volatility, which may result in the loss of your entire principal. Please assess the risks carefully.