Citigroup Confirms It Is Actively Evaluating a Citi-Issued Stablecoin

• Citigroup’s shares hit their highest level since 2008, supported by solid earnings and a $4 billion stock buyback
• Internal research from the company projects that the stablecoin market could balloon to $3.7 trillion by 2030
• Citigroup’s interest in stablecoins goes beyond issuance, as the bank is investigating services for managing stablecoin reserves and simultaneously developing custodial solutions for cryptocurrency assets

In its Q2 earnings call, CEO Jane Fraser confirmed that Citigroup (the third-largest bank in the US) is actively evaluating the launch of a Citi-issued stablecoin, with promising interest in tokenized deposits, reserve management, and custody services. 

This move coincides with Citigroup’s shares hitting their highest level since 2008, supported by solid earnings and a $4 billion stock buyback.

Internal research from the company projects that the stablecoin market could balloon to $3.7 trillion by 2030.

Additionally, the bank’s interest in stablecoins goes beyond issuance, as the CEO confirmed that Citigroup is investigating services for managing stablecoin reserves and simultaneously developing custodial solutions for cryptocurrency assets.

Wall Street’s push into stablecoins

Citigroup isn’t the only bank that is getting in on the stablecoin craze lately. For instance, JPMorgan (once skeptical about crypto) has pivoted toward stablecoin initiatives, with CEO Jamie Dimon stating the bank will be involved and piloting its JPM Coin for internal settlements.

Also, a banking consortium consisting of JPMorgan, Citigroup, Bank of America, and Wells Fargo is reportedly discussing a joint digital dollar stablecoin, aimed at improving cross-border and real-time payments infrastructure.

Not all regulators are on board

Still, not all banks share the same stablecoin views. A few days ago, the UK’s Bank of England Governor Andrew Bailey cautioned against bank-issued stablecoins, suggesting they risk destabilizing traditional deposits. 

He also stressed the importance of regulation over innovation.

Growing interest in stablecoins

Interestingly, it looks like there is some competitive pressure brewing, considering that banks aren’t the only ones involved in stablecoins. It was reported that big companies like Amazon and Walmart are also considering the launch of their own stablecoin, which could potentially save these retail giants billions in credit transaction fees.

If this turns out to be true, it may push banks to innovate or risk losing relevance.

The growing interest among corporations is likely due to the fact that tokenized deposits and stablecoins offer faster, lower-cost, and traceable payments, which makes them ideal for cross-border remittances and corporate liquidity management.

Citigroup’s evaluation of whether to enter the stablecoin market shows that traditional banks are increasingly welcoming the technology behind cryptocurrencies, connecting the world of decentralized crypto with traditional financial systems.