Citigroup Evaluates Custody Services for Stablecoin Collateral and Cryptocurrency ETFs, Highlighting Wall Street’s Accelerated Embrace of Blockchain Technology
(Background: Conversation with Circle CEO: Profit Models, Banking Competition, and Arc Blockchain Strategy)
(Background Information: Ethereum Developer Installs “Malicious AI Plugin” and Gets Hacked, Cryptocurrency Wallet Cleared in Three Days, Ten Years of Cybersecurity Experience Proves Ineffective)
Citigroup has taken new steps into Web3 by seeking a custody role for stablecoins and cryptocurrency ETF collateral, diving into the deep waters of digital assets. In the past, mainstream banks mostly observed Bitcoin and Ethereum from a distance. Now, with regulatory frameworks becoming clearer and the Trump administration’s friendly policies in place, Citigroup has set its sights on the more compliant stablecoin market.
According to Citigroup’s internal estimates, the stablecoin market is expected to expand to $3.7 trillion by 2030, which could reshape three major areas: cross-border settlements, capital management, and wealth allocation. Biswarup Chatterjee, the Global Head of Collaboration and Innovation in the Financial Services Division, stated:
“Providing custody services for quality assets supporting stablecoins is our primary consideration… Cryptocurrency ETFs are also a possibility, as they require custody of equivalent digital currencies to support them.”
The Custody Ecosystem: A Competition of Security and Scale
The ability to securely protect user assets is key to the widespread adoption of cryptocurrency finance. The U.S. GENIUS Act mandates that stablecoin issuers must hold audited, one-to-one cash or government bond reserves. Citigroup is eyeing this threshold and plans to include high-quality government bonds and cash in its own custody; the bank’s existing risk management processes are expected to reduce the uncertainty involved in tokenized asset operations. On the other hand, custody for cryptocurrency ETF collateral largely flows to Coinbase, which holds about 80% market share, but Citigroup’s trust among traditional financial clientele still provides it with a significant opportunity in the market.
Tokenized Payments: 24/7 Settlements Become Possible
Meanwhile, Citigroup also sees potential in blockchain to enhance payment efficiency. Its internal “Citi Token Services” platform has completed multiple practical tests in New York, London, and Hong Kong, handling amounts reaching billions of dollars, proving that tokenized deposits can achieve near-instant settlements within a 24/7 operational framework.
Citigroup is also collaborating with fintech partners like Payoneer to extend its services to the payment needs of cross-border e-commerce and freelancers, thereby building the next generation of global clearing networks.
Traditional Finance Takes Off, Competition Enters Deep Waters
Citigroup’s actions are not isolated. Companies like JPMorgan, Goldman Sachs, and BNY Mellon have also begun to dip their toes into the water, covering areas such as using cryptocurrencies as collateral for loans and providing bank-grade risk management for DeFi protocols. Although each company approaches the market from different angles, the underlying logic remains consistent: combining blockchain efficiency with existing regulatory advantages, while ensuring anti-money laundering, cybersecurity, and customer protection are in place.
In summary, Citigroup is leveraging custody services and testing tokenized payments to accelerate the extension of traditional banking brands into the digital asset realm. Despite challenges such as market share competition, security incidents, and the need for unified technical standards in the future, Wall Street has made a clear statement: blockchain is no longer just an ancillary experiment but a new essential course in financial infrastructure.
