Coinbase and Citigroup have announced a major partnership aimed at integrating stablecoins into traditional banking infrastructure. The arrangement will allow Citi’s large corporate clients to accept stablecoin payments from customers at checkout through Citi’s merchant-processing services. Coinbase will provide the stablecoin payment rails and blockchain technology, while Citi will settle the funds and act as the bank of record.
Stablecoins held at Coinbase under the program will earn an interest-like reward, currently set at 3.75% annually. The partnership is being positioned as a step toward making stablecoins usable as everyday money within regulated financial systems. Citi’s head of services, Shahmir Khaliq, described the move as part of connecting digital assets to the traditional dollar-based economy and completing the existing puzzle between crypto and banking.
Brett Tejpaul, head of Coinbase Institutional, said the initiative is designed to let consumers and businesses move between dollars and stablecoins without leaving the traditional banking system. Citi is also expanding its token services, with the bank’s blockchain network now live in Japan and the UAE, bringing the total to seven jurisdictions. Citi is part of a group of nearly two dozen firms planning to launch a joint stablecoin.
The announcement comes after the Clarity Act, a crypto-focused bill, failed to advance in the Senate. Citi indicated that the legislative setback will not slow its current work within existing regulatory limits. Analysts have reacted with mixed views. Robert W. Baird raised its Coinbase price target from $130 to $205, while Oppenheimer trimmed its target to $193, Barclays cut its target to $95, and Piper Sandler lowered its target to $146. The consensus rating remains a Hold, with an average price target of $222.47.
Coinbase stock opened at $195.11 on Monday, between its 50-day moving average of $170.99 and its 52-week high of $402.16. The company’s latest quarterly results showed an adjusted loss of $1.36 per share, much wider than the expected loss of $0.44 per share, while revenue came in at $1.22 billion, below the $1.29 billion forecast. Insider selling has also been active, with CFO Alesia Haas selling more than $8 million in shares and director Marc Andreessen selling about $1.4 million on September 21.
