Citigroup is actively developing custody services for cryptocurrency-based investment products, specifically targeting Bitcoin exchange-traded funds (ETFs) and stablecoin reserves, as confirmed by CEO Jane Fraser and global partnerships head Biswarup Chatterjee. This initiative follows recent U.S. regulatory reforms, including legislation passed last month mandating stablecoin issuers to hold safe assets like U.S. Treasury bonds or cash.
The bank's strategy prioritizes custody of high-quality assets backing stablecoins—a market valued at $250 billion—while also exploring digital asset custody for Bitcoin spot ETFs. Chatterjee emphasized the urgency, noting BlackRock's iShares Bitcoin Trust alone requires safeguarding approximately $90 billion in BTC. Citigroup further aims to leverage stablecoins for 24/7 cross-border payments through its existing blockchain network, enabling instant dollar conversions between New York, London, and Hong Kong.
Fraser revealed considerations for a "Citi stablecoin," aligning with broader institutional trends. The move challenges Coinbase, which currently dominates 80% of crypto ETF custody. Regulatory shifts are framed as catalysts, with Chatterjee stating: "Custody of high-quality assets backing stablecoins is the first option we are exploring" to support market infrastructure.