A Citigroup (C.US) executive revealed that the bank is exploring stablecoin custody and related services. This move indicates that significant changes in the US policy environment are driving mainstream financial institutions to accelerate their expansion into cryptocurrency business territories.

After the US Congress passed legislation paving the way for crypto token payment and settlement applications, Citigroup has joined traditional financial institutions like Fiserv (FI.US) and Bank of America (BAC.US) in entering the stablecoin sector.

Stablecoins are cryptocurrencies pegged to fiat currencies (typically the US dollar) or other assets. The new legislation requires stablecoin issuers to hold safe assets such as US Treasury bonds or cash as reserves, creating business opportunities for traditional custodial banks in asset custody and management.

"We're first considering providing custody services for stablecoin reserve assets," said Biswarup Chatterjee, Head of Global Partnerships and Innovation at Citi's Services division, in an interview. As a core business unit of Citigroup, this division provides comprehensive financial services including treasury management, cash management, and payment clearing for large enterprises. Citigroup is currently undergoing major strategic restructuring.

A McKinsey study shows that the current global stablecoin issuance scale is approximately $250 billion, but it is mainly used for cryptocurrency trading and settlement. Although Citigroup revealed last month that it is considering issuing its own stablecoin, it had never previously disclosed the full scope of its digital asset strategy.

The bank is also studying custody solutions for underlying assets of cryptocurrency investment products. Since the SEC approved Bitcoin spot ETFs last year, asset management giants like BlackRock have successively launched related products. The largest Bitcoin ETF, iShares (IBIT.US), has reached a market value of $90 billion.

"These ETFs require custody support for equivalent digital currencies," Chatterjee noted. This field is currently dominated by cryptocurrency exchange Coinbase (COIN.US), whose spokesperson stated that it has provided custody services for over 80% of cryptocurrency ETFs.

In payment innovation, Citigroup is testing the use of stablecoins to improve cross-border payment efficiency—traditional banking systems typically require several days to complete such transactions. The bank has launched a 24-hour blockchain dollar "tokenization" payment system connecting accounts in New York, London, and Hong Kong.

Chatterjee revealed that the bank is developing service solutions supporting stablecoin transfers between customer accounts and real-time redemption, and has begun consultations with clients on specific application scenarios.

Under the Trump administration's crypto-friendly policies, US banking and securities regulators, who previously maintained cautious attitudes toward traditional financial institutions' involvement in volatile cryptocurrency markets, have now shifted to more open policy positions.

However, Chatterjee emphasized that institutions like Citigroup still need to comply with anti-money laundering and foreign exchange control regulations in various countries. In cryptocurrency asset custody, they must ensure the legality of fund sources and strengthen cybersecurity and operational risk control systems.

The bank is also evaluating the feasibility of independently issuing stablecoins.