The move comes as Wall Street giants expand their footprint in the digital currency space
CITI, one of the top banks in the country, is slated to roll out a game-changing move next year in the digital space that will come as a major shake up to banking services.
Citi, among other banking giants like Bank of America and JPMorgan, is dipping its toes in the world of cryptocurrency.
A more favorable regulatory environment in the country has pushed several US banks to offer more services related to digital assets.
For example, Citi is planning to roll out its crypto assets custody service next year, a company executive told CNBC.
The bank – the third largest in the country – has been developing the service for more than two years and is making progress, Biswarup Chatterjee, global head of partnerships and innovation in the services business at Citi, told the outlet.
“We have various kinds of explorations… and we’re hoping that in the next few quarters, we can come to market with a credible custody solution that we can offer to our asset managers and other clients,” he said.
The service would permit Citi to hold native bitcoin and other crypto on behalf of customers as part of an in-house developed technology solution for custody.
Chatterjee said that the bank is also looking at potential partnerships with third-parties.
“We may have certain solutions that are completely designed and built in-house that are targeted towards certain assets and certain segment of our clients, whereas may we may use a third party, lightweight, nimble solution for other kind of assets,” he told CNBC. “So we’re not currently ruling out anything.”
Not all Wall Street banks are keen on the custody strategy, with the CEO of JPMorgan, Jamie Dimon, saying earlier this year that the rival bank will allow customers to purchase cryptocurrencies but will not custody the asset.
Citi’s move to expand into cryptocurrency comes thanks to a friendlier regulatory environment for digital assets in the US under President Donald Trump, reversing the trend of traditional financial institutions generally avoiding cryptocurrencies such as bitcoin and ether.
New laws are being rolled out under the current administration such as the GENIUS Act, for example, which regulates stablecoins by establishing a federal framework for payment stablecoin issuers.
As Washington takes steps to establish clearer rules for digital assets, traditional financial institutions have more confidence to develop and launch crypto-related products and services.
MONEY MOVES
Other major moves by banking giants further indicate that crypto is finally making its way into the world of mainstream finance.
For example, Citi and other banks are entering the broader blockchain technology space, a system that can move cash around the world in different currencies rapidly – even when traditional banks are not open.
Citi’s deposit token, called Citi Token Services, is essentially a digital representation of a commercial bank deposit, allowing for cross-border movement of funds at any time of day.
JPMorgan has also announced plans this year for a deposit token.
A growing number of Wall Street institutions are also expanding into stablecoins – digital tokens typically backed by fiat currency such as the US dollar, euro, and Japanese yen.
Chatterjee said that stablecoins could be a great tool for regions of the world with a less-developed banking and payments system.
As Citi’s clients expand into such countries and interact with suppliers and customers there, a stablecoin-like product could be practical, said the banking executive.
“We do recognize the fact that there are these pockets in the world where you have a commercial need from our clients to be there and do business,” Chatterjee told CNBC.
He noted that Citi is still in the “early stages of the stablecoin exploration.”
Bank of America CEO Brian Moynihan similarly announced over the summer that the bank was working on launching the digital currency, with an executive over at JPMorgan also sharing that the company was “exploring” stablecoins.
“There’s a real opportunity for us to think about how we can offer different services for our clients on the cash side, as well as responding to client demand to do things on stablecoins,” the executive told CNBC.
“And that strategy is still emerging, as you can understand, because it’s only really been a few months since we’ve had some more clear regulation around what the opportunity looks like.”
As banking giants take greater strides in the digital assets space, read up on other big changes.
For example, a massive 1,100-branch bank has officially snapped up Comerica in a $10.9 billion deal.
Plus, check out how you can squash a $35 monthly banking fee by using a sneaky “alert” method – plus six other costly charges to avoid.
