Citigroup plans to significantly expand its offering in the digital asset space. The long-established institution is currently exploring entry into custody services for stablecoin reserves and crypto-based ETFs - a move that would put the bank in direct competition with established crypto service providers such as Coinbase.
In addition, stablecoin payments are to be accelerated and payment processes modernized. Citigroup is considering custody services for secure assets backing stablecoins, such as US Treasuries and cash. In parallel, the bank is reviewing solutions for stablecoin-based payments to optimize settlement times. The custody of digital assets underlying crypto ETFs is also under consideration, given the strong growth of this segment. The plans follow new regulatory requirements that open up stablecoin infrastructure to traditional financial players.
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Competition for Coinbase
Citigroup is among the first major banks to actively explore new crypto services following the recent regulatory shift (e.g., through the GENIUS Act). The initial focus is on the custody of high-quality assets, but in the medium term, the issuance of its own stablecoin is also conceivable. This would not only allow Citigroup to enter the ETF custody business - currently 80% dominated by Coinbase - but also to expand payment solutions via stablecoins.
A key driver behind Citigroup’s move is the recent regulatory developments in the US, which make it easier for banks to enter the stablecoin and crypto ETF sector. New laws create clear standards for the custody of assets backing stablecoins and define technical as well as compliance requirements. This legal certainty enables large banks to offer products that until now have been almost exclusively reserved for crypto-native companies.
Market impact
If Citigroup were to enter the market for stablecoin custody and crypto ETF asset safekeeping, it could significantly intensify competition. Institutional investors who have so far relied on large banks for security or reputational reasons would, for the first time, have access to such services from a source they already trust. This could not only reduce the market share of Coinbase and other service providers, but also pave the way for more banks to develop similar offerings.
