- Citi will combine in-house infrastructure and external tools to hold native digital assets for institutional clients.
- Eased federal rules and the GENIUS Act enable banks to offer custody and engage in stablecoin activity without prior approval.
- Citi plans to join a euro token consortium and explore stablecoin use in underserved regions through BVNK investment.
Citibank plans to enter the crypto custody market in 2026 after nearly three years of infrastructure development, according to Biswarup Chatterjee, the bank’s global head of partnerships and innovation.
The build traces back to regulatory shifts under the Trump administration, including the GENIUS Act. Citi intends to hold native digital assets for institutional clients rather than using tokenized exposure. This approach places the bank in a small group of major institutions preparing to manage digital holdings directly.
Dual System Build and Technology Mix
Chatterjee said the bank is developing its custody platform through internal architecture and third-party tools. He noted that certain asset classes will rely on in-house systems, while others may use lightweight external frameworks.
This structure allows flexibility across client segments without committing to a single setup. The plan differs from peers that rely heavily on fintech custodians. The move also aligns Citi with early adopters among major banks.
BNY Mellon, Deutsche Bank and Standard Chartered already built or tested digital custody services. Analysts expect Citi’s entry to increase competition with State Street and BNY Mellon, which support asset managers moving into crypto.
Regulatory Shifts and Institutional Positioning
Recent federal decisions now allow regulated banks to handle digital assets without first seeking approval. Agencies including the Federal Reserve, FDIC and OCC removed earlier requirements, clearing the way for broader participation.
The GENIUS Act also created rules for stablecoins, giving banks authority to issue, hold and trade them. Treasury Secretary Scott Bessent has said the legislation could expand the market to $2 trillion.
Citi’s work unfolds alongside its Citi Token Services platform, which uses distributed ledger technology for settlement. JPMorgan has taken a different route. Scott Lucas, its global head of markets digital assets, told CNBC the firm does not plan to hold client crypto and will focus instead on deposit tokens and stablecoin development.
Stablecoin Engagement and Client Demand
Citi is assessing stablecoin use in regions with limited financial infrastructure. Chatterjee said fiat-pegged tokens could offer payment support in underserved markets. The bank has invested in BVNK, a stablecoin infrastructure provider, through Citi Ventures.
Additionally, Citi plans to join a consortium of European banks working on a regulated euro token for launch in late 2026. Scott Chronert, Citi’s U.S. equity strategist, said interest in Bitcoin and Ethereum remains strong among institutional investors heading into 2026.
He pointed to those assets as hedge options for equity holders, which aligns with custody demand from hedge funds, family offices and asset managers. Those groups cite security, wallet management and on-chain verification as central requirements.
