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Citigroup Sets Sights on Regulated Stablecoin Custody Amid Crypto Demand Surge

Citigroup is making a significant move into the cryptocurrency arena, particularly focusing on stablecoin custody and blockchain payment solutions.

This shift occurs as traditional financial institutions increasingly engage with digital assets, reflecting a booming demand for stablecoins and related products.

The bank has announced its evaluation of new opportunities following recent legislation in the U.S. that clarifies stablecoin regulations and backing requirements.

These regulations compel issuers to maintain secure reserves, such as cash and U.S. Treasuries, open up avenues for custody services.

Biswarup Chatterjee, Citigroup’s global head of partnerships and innovation, indicated that their priority is to provide custody for quality assets that underpin stablecoins.

Additionally, Citigroup is exploring custodial support for cryptocurrency exchange-traded funds (ETFs), which have seen increasing institutional interest since the SEC approved spot bitcoin ETFs.

With leading products like the Ishares Bitcoin Trust reaching substantial market capitalizations, the demand for secure digital asset storage is evident.

Although companies like Coinbase currently dominate ETF custodianship, there is a growing opportunity for Citigroup as the landscape evolves.

Furthermore, Citigroup is enhancing its blockchain payment services, enabling clients to conduct instant settlements with stablecoins.

The bank acknowledges that any new crypto services must comply with strict regulatory standards, ensuring robust protections for digital asset custody.