Wall Street large Citigroup is weighing plans to supply cryptocurrency custody and cost companies, aiming to capitalize on a market bolstered by Trump-era regulatory approvals and pro-industry laws.
Biswarup Chatterjee, a Citigroup government, instructed Reuters that the financial institution’s preliminary focus would probably be custody companies for “high-quality property backing stablecoins.”
Chatterjee works inside Citigroup’s companies division, which manages treasury, funds, money administration and different enterprise options for big firms.
The financial institution can also be exploring custody choices for crypto-linked exchange-traded merchandise, which might embrace Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs).
“There must be custody of the equal quantity of digital foreign money to assist these ETFs,” Chatterjee stated.
Bitcoin ETFs have surged in recognition since their debut in early 2024. According to Bitbo, the 12 US spot Bitcoin ETF issuers now maintain practically 1.3 million BTC — about 6.2% of the overall circulating provide.
BlackRock’s iShares Bitcoin Trust (IBIT) is the biggest, with an estimated market worth of round $88 billion.
After a gradual begin, Ether ETFs have seen a surge of inflows, with BlackRock’s Ethereum fund changing into the third-fastest in historical past to achieve $10 billion in property.
Related: SEC approves in-kind creations and redemptions for crypto ETPs
Custody, funds wouldn’t be Citi’s first transfer into crypto
Citigroup’s exploration of custody and cost companies wouldn’t mark its first foray into the cryptocurrency market.
Earlier this 12 months, the financial institution partnered with Switzerland’s SIX Digital Exchange to leverage blockchain expertise to enhance non-public markets by means of tokenization.
Citi has been eyeing tokenization since no less than 2023, when it described the expertise because the subsequent “killer use case” in crypto — estimating it might attain a $5 trillion market valuation by 2030.
Citi was additionally reportedly amongst a number of Wall Street giants, together with JPMorgan, Wells Fargo and Bank of America, exploring the potential for issuing a joint stablecoin.
A latest report by Ripple, CB Insights and the UK Centre for Blockchain Technologies ranked Citigroup among the many most energetic institutional buyers in blockchain firms, with 18 offers between 2020 and 2024.
Traditional monetary establishments have been buoyed by Trump-era efforts to supply regulatory readability for the crypto sector — initiatives which have prolonged to the US Securities and Exchange Commission and the latest passage of the US GENIUS Act, a key stablecoin legislation.
In July, the House of Representatives handed the CLARITY market construction invoice, the Anti-CBDC Surveillance State Act and the GENIUS Act.
Related: Crypto Biz: Wall Street giants wager on stablecoins
