Citigroup is evaluating its chances of launching its own stablecoin to strengthen its position in the digital payments sector. CEO Jane Fraser discussed strategies related to tokenized deposits.
Citigroup's Plan for a Stablecoin
Citigroup aims to transform traditional deposits into blockchain-based formats for nearly instantaneous transactions. Fraser states that the bank is capable of issuing dollar-backed stablecoins while ensuring reserve transparency. The bank also plans to offer client custody services and secure blockchain transactions.
Big Banks Competing in the Stablecoin Space
Major financial institutions, including Citigroup, are intensifying support for U.S. dollar-denominated stablecoins. JPMorgan has tested its JPMD coin on the Base network, while DTCC’s efforts in the stablecoin sector are driving competitive developments. The pending GENIUS Act, which has passed the Senate and awaits House approval, could establish regulatory frameworks shaping this competition.
Future of Stablecoins and Traditional Banks
Geoffrey Kendrick from Standard Chartered highlights that stablecoins are increasingly prominent in financial discussions in major U.S. cities. He speculates that a significant growth in the stablecoin market, projected to reach $750 billion by 2026, could influence traditional financial markets and regulatory environments. Citigroup's research also suggests that the expansion of the U.S. dollar-pegged stablecoin sector could fundamentally alter the banking landscape.
Citigroup views stablecoins as a tool for accelerating transactions and adhering to regulatory standards, reflecting a growing trend among major banks to rapidly utilize digital assets amid a changing financial landscape.
