Citi plans to introduce crypto custody services next year as the Wall Street banking giant pushes deeper into the digital asset space.
The plan will enable the bank to hold digital assets such as Bitcoin and Ethereum for customers, according to a CNBC report.
“We’re hoping that in the next few quarters, we can come to market with a credible custody solution that we can offer to our asset managers and other clients,” said Biswarup Chatterjee, global head of partnerships and innovation for services.
The service, which has been in the works for two to three years, will provide institutional clients a regulated way to store crypto. Chatterjee said that the bank is exploring a hybrid approach that combines both internal solutions with those offered by third parties.
“We may have certain solutions that are completely designed and built in-house that are targeted towards certain assets and certain segment of our clients,” Chatterjee said, adding that the bank could still use a “third party, lightweight, nimble solution for other kind of assets.”
Citi Exploring Stablecoin Issuance
In addition to crypto custody, Citi is also experimenting with stablecoin issuance. During the bank’s second-quarter earnings call in July, Citi’s CEO Jane Fraser said the bank is exploring stablecoin issuance, but did say that tokenized deposits are an immediate focus.
That’s amid a more crypto-friendly regulatory climate in the US under the Donald Trump Administration. In July, the US President signed the GENIUS Act into law, which is the first federal framework for these digital assets. Stablecoin firms looking to issue their tokens in the US now have guidelines to follow as a result.
That regulatory clarity has seen the stablecoin market cap soar in recent weeks to a new all-time high (ATH) above $300 billion.
In just the past week, the capitalization for the stablecoin sector rose over $1.939 billion. Tether’s USDT is still the dominant token in the market despite the increased competition, accounting for over 59% of the market’s total. Circle’s USD Coin (USDC) is the next-biggest, followed by Ethena’s USDe token.
The regulatory clarity has also seen traditional finance firms, who were once hesitant to enter the space, make a push into stablecoins.
Earlier this month for example, Citi’s venture capital arm acquired a stake in the stablecoin infrastructure startup BVNK, alongside Visa. This deal followed earlier experiments in blockchain-based trade finance and cross-border payments.
A group of major banks including Bank of America, Deutsche Bank, Goldman Sachs, UBS, Citi, MUFG, Barclays, TD Bank, Santander, and BNB Paribas has also announced plans to jointly explore issuing stablecoins pegged to G7 currencies.
Meanwhile, JPMorgan has already developed its own internal token called JPM Coin that was launched in 2019, which is intended for interbank and institutional use.