The push by big banks towards a blockchain-based financial system is becoming more noticeable. Citi’s CEO, Jane Fraser, recently revealed that her bank is “looking at the issuance of a Citi stablecoin.” She added that the Wall Street firm is also considering tokenised deposits and custody services for crypto assets.
Fraser confirmed the bank’s position on stablecoins during an earnings call with analysts yesterday (Tuesday).
Friendly Regulations Are Pushing Banks Towards Crypto
She pointed out that the White House administration's shifting stance has encouraged the bank to develop its crypto-related plans.
“We really welcome the administration’s willingness to allow banks to participate in the digital asset space more easily,” Fraser said, referring to President Trump’s Genius Act—a bill that introduces a regulatory structure for stablecoin issuers.
“Up until now, it has been hard for us to participate on a level playing field.”
US lawmakers are also reviewing landmark crypto legislation that would reverse restrictions imposed during the Biden administration.
Earlier this year, the Federal Reserve scrapped two supervisory rules that had required banks to notify them before engaging in any crypto activity and to obtain approval for stablecoin-related services.
Are Stablecoins the Future for Banks?
Citi is not the first major US bank to go public with its stablecoin ambitions. In May, The Wall Street Journal reported that JPMorgan, Bank of America, and Wells Fargo are also exploring similar projects.
Meanwhile, Société Générale became the first large bank to issue a dollar-pegged cryptocurrency—“USD CoinVertible”—which is set to launch on Ethereum and Solana public blockchains in July.
Read more: A Big Bank to Launch a Stablecoin: Is the Adoption Mainstream Now?
Stablecoin demand has grown sharply this year. Market capitalisation has increased, and yield-bearing stablecoins now represent about 4.5 per cent of the total, with a circulating supply of $11 billion. A recent FinanceMagnates.com report stated that more than 109 million wallets are currently using stablecoins.
The high-profile public listing of stablecoin issuer Circle earlier this year also reflected strong interest in the sector from both retail and institutional players.
This article was written by Arnab Shome at www.financemagnates.com.
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