- The push into digital assets is supported by a more permissive regulatory environment under the Trump administration.
- Citi is already running blockchain-based tokenized U.S. dollar transfers between major financial hubs.
In Washington, a single policy change has opened the door for Wall Street banks to step deeper into crypto markets. Citigroup is now weighing a role in custody, payments, and even conversion services for stablecoins, as demand grows for traditional financial institutions to support digital assets, Reuters reported.
Congress recently passed legislation requiring stablecoin issuers to fully back tokens with cash or U.S. Treasuries. The measure not only legitimized the tokens for broader use in payments and settlements but also created an opening for traditional custody banks. These firms can now manage the safe assets that back the digital coins.
Citigroup’s focus extends beyond stablecoins. The bank is also considering offering custody for digital assets tied to crypto-related investment products. Since the Securities and Exchange Commission approved spot bitcoin ETFs last year, firms like BlackRock have rolled out funds, including its iShares Bitcoin Trust, which now carries roughly $90 billion in market value.
Citi is experimenting with payments as well. The bank already runs blockchain-based tokenized U.S. dollar transfers between New York, London, and Hong Kong around the clock. It is now developing services that would allow clients to move stablecoins across accounts or convert them instantly into dollars, with the goal of cutting settlement times from days to seconds.
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Payments And Tokenization
The bank has also spoken with clients about potential use cases for these services, particularly in cross-border payments.
Under President Trump’s administration, regulators have adopted a more permissive stance toward crypto, encouraging traditional financial firms to enter the market. But banks must still comply with anti-money laundering standards and international transfer rules.
Early this year, Citigroup hinted at a possible move into the stablecoin market. The U.S. banking giant’s chief executive Jane Fraser told analysts the firm is actively studying tokenized deposits and may go as far as issuing a Citi-branded stablecoin.
Fraser added that the bank is exploring several related areas, including managing the reserves that back stablecoins and providing custody services for crypto assets.
Both services are seen as natural extensions of Citi’s core business, aligning with the broader industry push to combine traditional balance-sheet trust with new forms of digital money.
