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New York-based banking giant Citigroup has announced its consideration of launching its own Citi stablecoin to strengthen its position in digital payments. In a recent earnings meeting, CEO Jane Fraser highlighted the bank’s belief in the significant potential of tokenized deposits. Citigroup is contemplating the management of stablecoin reserves and offering cryptocurrency custodial services, aiming to enhance speed and scalability within its existing payment infrastructure.
Citigroup Considers Stablecoin Issuance
The proposed Citi stablecoin could convert traditional customer deposits into blockchain-based representations, facilitating instantaneous and round-the-clock transactions. According to Fraser, the bank could directly control the issuance of US dollar-pegged stablecoins while improving reserve transparency. Additionally, Citigroup plans to offer custodial services for clients and settle transactions on the blockchain without waiting for consensus.
Citigroup’s initiative is comparable to JPMorgan’s move with its JPM Coin, which targets limited user groups, and the DTCC’s stablecoin project. However, Fraser emphasized that Citigroup is prioritizing regulatory compliance and risk management for tokenized deposits. The bank aims for seamless integration into the global payment network, aligning with new stablecoin regulations crafted by U.S. authorities.
Wall Street’s Race to Capture Growing Market Share
Major Wall Street institutions, including Citigroup, are accelerating efforts to support US dollar-backed stablecoins. JPMorgan has been testing its JPMD coin on the Base network, and DTCC’s stablecoin plans have intensified institutional competition within the sector. The GENIUS Act, passed by the Senate and pending in the House of Representatives, is expected to provide a legal foundation for this competition.
Geoffrey Kendrick, Head of Digital Asset Research at Standard Chartered, reported that stablecoins have been a prevalent topic in discussions across Washington, New York, and Boston. Kendrick predicts that if the stablecoin market, currently valued at $257 billion, reaches $750 billion by the end of 2026, it could begin to influence traditional financial assets and policies. Citigroup’s research similarly indicates that the growth of the US dollar-pegged stablecoin market could reshape the banking ecosystem.
