Wall Avenue big Citigroup is weighing plans to supply cryptocurrency custody and fee providers, aiming to capitalize on a market bolstered by Trump-era regulatory approvals and pro-industry laws.
Biswarup Chatterjee, a Citigroup government, informed Reuters that the financial institution’s preliminary focus would possible be custody providers for “high-quality property backing stablecoins.”
Chatterjee works inside Citigroup’s providers division, which manages treasury, funds, money administration and different enterprise options for big companies.
The financial institution can be exploring custody choices for crypto-linked exchange-traded merchandise, which may embrace Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs).
“There must be custody of the equal quantity of digital foreign money to help these ETFs,” Chatterjee stated.
Bitcoin ETFs have surged in recognition since their debut in early 2024. In accordance with 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 Belief (IBIT) is the biggest, with an estimated market worth of round $88 billion.
After a sluggish begin, Ether ETFs have seen a surge of inflows, with BlackRock’s Ethereum fund turning into the third-fastest in historical past to achieve $10 billion in property.
Associated: 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 fee providers wouldn’t mark its first foray into the cryptocurrency market.
Earlier this yr, the financial institution partnered with Switzerland’s SIX Digital Alternate to leverage blockchain expertise to enhance non-public markets by way of tokenization.
Citi has been eyeing tokenization since no less than 2023, when it described the expertise as the following “killer use case” in crypto — estimating it may attain a $5 trillion market valuation by 2030.
Citi was additionally reportedly amongst a number of Wall Avenue giants, together with JPMorgan, Wells Fargo and Financial institution of America, exploring the potential of issuing a joint stablecoin.
A current report by Ripple, CB Insights and the UK Centre for Blockchain Applied sciences ranked Citigroup among the many most lively institutional traders in blockchain corporations, with 18 offers between 2020 and 2024.
Conventional 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 Alternate Fee and the current passage of the US GENIUS Act, a key stablecoin legislation.
In July, the Home of Representatives handed the CLARITY market construction invoice, the Anti-CBDC Surveillance State Act and the GENIUS Act.
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