Citigroup Explores Issuing Stablecoin for Payments

Citigroup, the third-largest bank in the U.S., is reportedly assessing the possibility of launching its own stablecoin to bolster its digital payment capabilities, as stated by CEO Jane Fraser during an earnings call. Fraser indicated that the bank is prioritizing opportunities in tokenized deposits over issuing the 'Citi stablecoin.' Fraser also mentioned that Citigroup's activities in the cryptocurrency space could include managing reserves for stablecoins and offering custody services. This exploration follows recent declarations by JPMorgan Chase CEO Jamie Dimon, who affirmed his bank's involvement with deposit coins and stablecoins, in light of their plans to introduce the JPMD, a blockchain asset similar to a stablecoin. Additionally, the Depository Trust & Clearing Corporation (DTCC) is reportedly working on developing a stablecoin. Wall Street's increasing interest in stablecoins aligns with U.S. efforts to promote and institutionalize U.S. dollar-backed stablecoins, especially with the ongoing push led by former President Donald Trump. The GENIUS Act, which aims to formalize the legal framework for USD stablecoins, has successfully passed the Senate and is now under consideration by the House of Representatives. While recent votes in the House did not advance the bill, Trump has assured that he engaged with key lawmakers who are expected to support it in subsequent votes. According to Geoffrey Kendrick, the Global Head of Digital Assets Research at Standard Chartered, 90% of his discussions with clients and policymakers across Washington, New York, and Boston have revolved around stablecoins. Kendrick predicts that once the stablecoin market cap reaches $750 billion, it will begin to affect traditional finance assets and policies. Currently, stablecoins hold a market cap of $257 billion, with projections to hit $750 billion by the end of 2026.