Citi Bank is making a significant move into the digital asset space, with plans to launch services for cryptocurrency products by 2026. This strategic shift aims to position the bank as a key player in the evolving landscape of digital finance, particularly in the realm of stablecoins and cryptocurrency Exchange-Traded Funds (ETFs). According to the assessment of specialists presented in the publication, this initiative reflects a growing trend among traditional financial institutions to embrace digital currencies.
Citi's Focus on Custody Services for Stablecoins
According to a senior executive at Citigroup, the bank's primary focus will be on providing custody services for the assets that back stablecoins, such as US Treasuries and cash. This initiative comes at a time when the demand for secure management of digital assets is surging, especially with the rise of spot Bitcoin ETFs that require robust custodial solutions.
Integration of Tokenized Asset Services
Citi's CIDAP (Citi Innovation Labs) is set to facilitate the issuance, transfer, custody, and programmability of tokenized assets across both public and private blockchains. By integrating these services into its existing treasury and cash management offerings, Citi aims to provide clients with instant payment solutions, enhancing the efficiency of cross-border transactions.
24/7 Tokenized US Dollar Transfers
The bank is already leveraging its network to enable 24/7 tokenized US dollar transfers between major financial centers, including New York, London, and Hong Kong. This capability will allow clients to transfer stablecoins or convert them into dollars for near-instant payments, addressing the speed and cost challenges often associated with traditional banking.
Positioning for Competition in Digital Asset Custody
Citi's move into digital asset custody comes after the SEC rescinded its accounting rule SAB 121, which had previously restricted US banks from engaging in this space for nearly three years. With approximately $2.5 trillion in assets under custody, Citi is positioning itself to compete with crypto-native firms like Coinbase as it prepares for a 2026 launch. Amit Agarwal, Citi's Head of Custody, highlighted the bank's commitment to modernizing its infrastructure to meet the demands of a future where traditional and digital assets converge.
In a notable contrast to Citi Bank's recent digital asset initiatives, the XRP community has seen the launch of mXRP, a yield-bearing liquid staking token that quickly garnered nearly $30 million in deposits. For more details, see mXRP launch.
