Citigroup Eyes Stablecoin Custody and Bitcoin ETF Asset Storage as US Rules Open $5 Trillion Digital Asset Market

Citigroup Targets Stablecoin Custody As US Rules Open New Market

Citigroup is preparing to step into cryptocurrency custody and payment services, focusing first on securing assets that back stablecoins under recently introduced US legislation.

The move positions the Wall Street bank to compete directly with crypto-native custodians such as Coinbase, which currently dominates the market for exchange-traded fund (ETF) asset storage.

High-Quality Reserves At The Centre Of Plans

Biswarup Chatterjee, Citigroup’s global head of partnerships and innovation, told Reuters the bank’s initial priority would be holding “high-quality assets backing stablecoins” — such as US Treasuries and cash — to meet strict new reserve requirements.

The rules, passed last month under the GENIUS Act, mandate full asset backing for all stablecoin issuers, creating an opening for established financial institutions to provide trusted custody services.

Citi’s services division, which manages treasury, payments and cash management for large corporations, is expected to oversee the custody operations, ensuring compliance across jurisdictions while safeguarding reserves.

ETF Custody Services Under Consideration

Alongside stablecoin reserves, Citigroup is exploring custody for digital assets linked to cryptocurrency ETFs.

The demand for secure storage has risen sharply since US regulators approved spot Bitcoin ETFs in early 2024, with 12 issuers now collectively holding nearly 1.3 million BTC — about 6.2% of the total circulating supply.

BlackRock’s iShares Bitcoin Trust leads the market with a valuation close to $88 billion.

Ether ETFs, though later to market, have seen rapid inflows, with BlackRock’s Ethereum fund reaching $10 billion in assets at record speed.

Citi aims to provide institutions with a banking-grade alternative to existing custodians, a role currently dominated by Coinbase, which serves more than 80% of ETF issuers.

Stablecoin Payments For Faster Settlement

Citigroup is also working on payment solutions that integrate stablecoins into its blockchain-based network for faster cross-border transactions.

The bank already operates a tokenised US dollar payment system between New York, London and Hong Kong, offering 24/7 transfers.

Future upgrades could allow clients to send stablecoins between accounts or instantly convert them into US dollars for near-instant settlement.

Chatterjee said the goal was to make stablecoin transfers “seamless” within Citi’s global infrastructure, which would give clients faster settlement without compromising on regulatory compliance.

Previous Moves Into Digital Assets

This is not Citi’s first engagement with blockchain technology.

Earlier in 2025, it partnered with Switzerland’s SIX Digital Exchange to explore tokenisation for private markets.

The bank had identified tokenisation as a potential $5 trillion opportunity by 2030 and was previously linked to discussions with JPMorgan, Wells Fargo and Bank of America on a possible joint stablecoin project.

Between 2020 and 2024, Citigroup completed 18 investments in blockchain companies, according to a report by Ripple, CB Insights and the UK Centre for Blockchain Technologies — placing it among the most active institutional investors in the sector.