Citigroup is making a significant move into the digital finance sector, aiming to connect traditional banking with blockchain technology. According to a senior executive who spoke with Reuters, the bank's initial focus will be on providing custody for high-quality reserves, like U.S. Treasuries or cash, that back stablecoins. This move is a direct response to recent U.S. legislation that requires stablecoins to be strictly backed by reserves.
Beyond stablecoin reserves, Citi is also exploring custody services for digital assets that are part of crypto ETFs, including spot Bitcoin products. This would place the bank among other financial institutions that are responding to the growing institutional demand for secure digital asset storage.
In addition, Biswarup Chatterjee, Citigroup's head of global partnerships and innovation, stated that the bank is developing payment solutions to make stablecoin transactions smoother. Citi plans to integrate stablecoin transfers into its existing blockchain-based payment network, which currently supports 24/7 tokenized dollar transfers between key financial hubs. Future plans include the ability to instantly convert stablecoins into U.S. dollars for near-instant cross-border settlements.
These actions are part of a larger trend of traditional financial institutions using blockchain to improve efficiency and reduce costs. For Citigroup, this strategy of combining regulated banking with the speed of tokenized payments could be a profitable way to enter the next phase of digital finance.
August 2025, Cryptoniteuae