Citigroup is collaborating with Coinbase to develop stablecoin payment systems for its corporate and institutional clients. The partnership focuses on enabling faster and more efficient transfers between fiat and cryptocurrencies. This move aims to address the slow and expensive nature of traditional banking money transfers, especially for cross-border transactions.
Debopama Sen, Head of Payments for Services at Citi, stated that their clients are seeking programmability, conditional payments, and improved speed and efficiency, alongside 24/7 payment processing. Citi is exploring on-chain stablecoin payments to meet these demands. Sen views stablecoins as an enabler within the digital payment ecosystem, fostering growth and enhanced functionality for clients.
The collaboration will focus on streamlining fiat pay-ins and pay-outs, supporting Coinbase's on- and off-ramps, which act as a bridge between traditional and digital asset ecosystems, along with payments orchestration. The goal is to provide faster settlements with less friction when sending large sums of money. Additional details regarding specific initiatives, including the exploration of alternative fiat to on-chain stablecoin payout methods, will be disclosed in the coming months.
Brian Foster, Global Head of Crypto as a Service at Coinbase, noted that Coinbase works with over 250 financial institutions globally. He emphasized that stablecoins are becoming a cornerstone of the evolving digital payment ecosystem. Foster also stated that institutional partners are interested in a wide range of services, including spot and derivatives trading, custodial operations, staking, and payments.
This partnership builds upon Citi's previous launch of a blockchain platform that allows clients to transfer tokenized deposits within the bank's network at any time. Citi's analyst Ronit Ghose, who leads the bank's "Future of Finance" research group, projects the stablecoin market could grow to over $1 trillion in the next five years, up from approximately $300 billion today. This growth is driven by real business use cases, where companies utilize stablecoins to pay suppliers, settle invoices, and transfer capital across borders without delays associated with traditional banking systems.
The collaboration follows the passage of the US GENIUS Act, which establishes a regulatory framework for stablecoins and takes effect in early 2027, creating a sense of urgency among major banks to explore their own stablecoin initiatives. Citigroup is among a growing group of Wall Street institutions, including JPMorgan and Bank of America, that are in the early stages of developing stablecoin-related services.
