MARKET INSIDER – Citi is aiming to launch a dedicated service for the custody of native crypto assets in 2026, marking a significant step as Wall Street giants accelerate their expansion into the digital currency space.
Biswarup Chatterjee, global head of partnerships and innovation in the services business at Citi, told Market Insider that the bank has been developing its crypto custody offering for the past two to three years and is making steady progress.
“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,” Chatterjee stated.
Regulatory Tailwinds Drive Institutional Adoption
For years, traditional financial institutions largely steered clear of assets like Bitcoin and Ether. However, a more favorable regulatory environment in the U.S., including new laws like the GENIUS Act aimed at regulating specific areas such as stablecoins, has paved the way for banks to launch digital asset products and services.
Custody involves a bank holding assets—in this case, the native cryptocurrency—on behalf of its clients. Banks are positioning themselves as a secure alternative to existing crypto custody models, such as digital exchanges or self-custody, by leveraging their history in asset custody and their heavily regulated status, which can mitigate risks like cyberattacks leading to asset theft.
For its solution, Citi is pursuing a dual-pronged technology strategy. Chatterjee noted the lender is looking at both an in-house developed technology solution and 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,” Chatterjee explained, adding that the bank is “not currently ruling out anything.”
The move contrasts with some peers; JPMorgan CEO Jamie Dimon has publicly stated that while the bank will permit clients to buy cryptocurrencies, it will not offer custody for the assets.
Beyond Crypto: The Promise of Tokenized Deposits and Stablecoins
Wall Street’s digital strategy extends beyond just custody to utilizing the underlying blockchain technology for core banking functions.
This year has seen several banks announce services touching on blockchain. JPMorgan unveiled plans for a deposit token, intended to serve as a digital representation of a commercial bank deposit, enabling 24/7 money movement built on the Ethereum network. Citi has a similar offering called Citi Token Services, which facilitates quick, cross-border movement of money at all hours, demonstrating how banks are seeing blockchain as a means to circumvent traditional banking windows.
The next potential frontier is stablecoins. These digital coins are typically pegged to a fiat currency like the U.S. dollar and backed by real-world assets to maintain a stable value, contrasting with the volatility of native cryptocurrencies.
Citi’s Chatterjee indicated that stablecoins could be particularly appealing in parts of the world with less-developed banking and payments systems. A stablecoin-like product could prove viable as Citi’s clients expand into those regions and interact with local suppliers and customers. This view is underpinned by commercial necessity, as the bank recently underscored its interest in the space with an investment in stablecoin infrastructure firm BVNK.
Other major players are also in the early stages of assessment. Bank of America CEO Brian Moynihan confirmed in July that the lender is working on launching stablecoins, and JPMorgan is actively exploring the concept.
Scott Lucas, global head of markets digital assets at JPMorgan, highlighted the strategic opportunity: “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.”
As regulatory clarity continues to emerge, the strategy for traditional finance is quickly moving from cautious exploration to strategic implementation, signaling a full-fledged commitment to integrating digital assets into the global financial infrastructure.
