Citi considers stablecoins, aims to launch crypto custody in 2026

city The bank aims to launch a crypto custody service in 2026, executives at the bank told CNBC as the Wall Street giant expands its footprint in the digital currency space.

Biswarup Chatterjee, global head of partnerships and innovation in Citi’s services business, said the bank has been developing its crypto custody services over the past few years and is making progress.

“We are conducting various types of exploration and we look forward to bringing to market a reliable custody solution that we can offer to asset managers and other customers in the coming quarters,” Chatterjee said.

For a long time, traditional financial institutions have distanced themselves from cryptocurrencies, including: Bitcoin and ether. However, President Donald Trump’s administration is creating a more favorable regulatory environment for digital assets in the United States, with new laws such as the GENIUS Act looking to regulate certain areas, including stablecoins. This has enabled traditional financial institutions to launch products and services related to digital assets.

In the world of cryptocurrencies, custodianship takes many forms, including digital asset exchanges that hold digital coins and institutions themselves that perform self-custody. Custodian services allow banks to store assets on behalf of their customers. This could include, for example, shares in a company. There are also companies that have started up specializing in cryptocurrency custody.

Chatterjee said future custodian services will include Citi holding its native cryptocurrency.

All forms of storage involve risks, including cyber-attacks that can lead to asset theft. Banks are highly regulated and have a track record of storing your assets, so they may be able to suggest alternatives.

For Citi, Chatterjee said the financial institution is looking at both homegrown storage technology solutions and the possibility of partnering with third parties.

“We may use specific solutions that are designed and built entirely in-house, targeted at specific assets or specific segments of our customers, while we may use third-party, lightweight, agile solutions for other types of assets,” Chatterjee told CNBC.

“So we’re not ruling anything out at this point.”

Not all Wall Street banks are convinced by the custodial strategy. JP Morgan CEO Jamie Dimon said earlier this year that the bank would allow customers to buy cryptocurrencies, but would not store the assets.

U.S. banks have launched a variety of services this year that are related to cryptocurrencies but also rely on the underlying blockchain technology.

Earlier this year, JPMorgan announced plans for a deposit token intended to serve as a digital representation of commercial bank deposits. This allows you to move money 24 hours a day, 7 days a week.

These deposit tokens are built on the Ethereum network. Citi also has its own version called Citi Token Services, which allows for quick cross-border funds transfers at any time of the day.

Banks are turning to blockchain as a way to quickly move different currencies around the world, even when traditional banking windows are closed.

The next potential product they are eyeing is stablecoins. This type of digital coin is typically pegged to a fiat currency, such as the US dollar, to maintain its value, and is backed by real-world assets such as bonds. The largest commercial stablecoin is from Circle USDC and tether’s USDT.

Citi’s Chatterjee said stablecoins could become attractive in parts of the world where banking and payment systems are less developed. As Citi customers expand into these countries and interact with suppliers and customers there, products like stablecoins could become viable, he said.

“We recognize the fact that there are regions in the world where there is a commercial need for customers to come and do business there,” Chatterjee said.

The Citi executive added that the bank is still in the “early stages of exploring stablecoins.” Last week, stablecoin infrastructure company BVNK announced it had received an investment from Citi, underscoring the bank’s interest in the space.

Other Wall Street banks are also in the early stages of evaluating stablecoins. bank of america CEO Brian Moynihan said in July that the company is working on issuing a stablecoin. JP Morgan is also on the list.

Scott Lucas, JPMorgan’s global head of digital asset markets, told CNBC on Monday that the company is also “exploring” digital currencies.

“There’s a real opportunity to think about how we can offer different services to our customers on the cash side as well as meeting customer demand for doing things with stablecoins,” Lucas said. “And as you can understand, that strategy is still emerging because we are only a few months away from having clearer regulations in place about what this opportunity looks like.”