Citi is developing a cryptocurrency custody service, aiming to launch by 2026. This initiative will allow the major Wall Street bank to securely hold native digital assets such as Bitcoin and Ethereum for its institutional clients. The move represents a significant expansion of Citi's involvement in the digital asset sector, providing a regulated storage solution that many traditional investors consider crucial for engaging with the cryptocurrency market.
Key Takeaways
- Citi plans to offer crypto custody services by 2026.
- The service will hold native digital assets like Bitcoin and Ethereum for institutional clients.
- This initiative provides a regulated storage solution, essential for traditional investors.
- Citi is using a hybrid approach, combining internal development with external partnerships.
- The bank is also exploring stablecoin issuance and tokenized deposits.
Citi's Entry into Digital Asset Custody
Citi's development of a crypto custody solution has been ongoing for two to three years. Biswarup Chatterjee, Citi’s global head of partnerships and innovation for services, confirmed the bank's plans in a recent interview. The goal is to introduce a robust custody offering to asset managers and other institutional clients within the next few quarters, potentially by 2026.
This service addresses a key concern for large institutional investors. Many traditional financial firms require regulated and secure methods to store digital assets before they can commit significant capital to the cryptocurrency space. Citi's entry could help bridge the gap between traditional finance and the rapidly evolving digital asset market.
"We have various kinds of explorations," Chatterjee stated. "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."
A Hybrid Approach to Digital Asset Storage
Citi is adopting a flexible strategy for its custody solution. The bank plans a hybrid model, which involves both internal development of certain tools and exploration of partnerships with external technology providers.
Fact
A hybrid custody approach allows financial institutions to build core components in-house while leveraging specialized third-party solutions for niche or rapidly evolving digital assets.
This approach allows Citi to maintain control over critical infrastructure while also benefiting from the agility and specialized expertise of external fintech firms. This flexibility is important in the fast-paced world of digital assets, where new technologies and asset types emerge regularly.
Chatterjee explained, "We may have certain solutions that are completely designed and built in-house … whereas we may use a third-party, lightweight, nimble solution for other kinds of assets. We’re not currently ruling out anything."
Expanding Digital Asset Initiatives
The planned custody service is part of Citi's broader strategy to expand its digital asset initiatives. The bank has been actively exploring several areas within the blockchain and cryptocurrency ecosystem.
Background
Institutional interest in digital assets has grown significantly. However, concerns about security, regulation, and infrastructure have limited wider adoption. Custody services address these concerns by providing secure, compliant storage for digital assets.
During the second-quarter earnings call in July, Citi CEO Jane Fraser mentioned the bank's interest in issuing a stablecoin. While stablecoins are on the radar, Fraser highlighted that tokenized deposits are an immediate priority for the bank.
- Stablecoin Issuance: Exploring the creation of a stablecoin, a digital currency pegged to a stable asset like the US dollar.
- Tokenized Deposits: Focusing on converting traditional bank deposits into digital tokens on a blockchain, which could streamline payments and settlements.
- Strategic Investments: Citi Ventures, the bank's venture capital arm, recently invested in BVNK, a stablecoin payments startup. Visa also participated in this funding round.
These initiatives demonstrate Citi's commitment to integrating digital assets into its core services. Earlier experiments by the bank included blockchain-based solutions for trade finance and cross-border payments, indicating a long-term strategic focus on the underlying technology.
The Growing Landscape of Institutional Crypto Services
If launched, Citi's crypto custody service would position it among a growing number of traditional financial institutions entering the digital asset back office. This trend reflects increasing demand from institutional clients for regulated and secure access to the cryptocurrency market.
Other major financial players are also developing or have already launched similar services. This competition is driving innovation and standardization within the institutional crypto sector. The entry of large banks like Citi is expected to bring more legitimacy and stability to the digital asset space, potentially attracting even more traditional capital.
The total crypto trading volume provides context for this institutional interest. Combined spot and derivatives trading on centralized exchanges reached $9.72 trillion in August 2025. This marked the highest monthly volume of the year, representing a 7.58% surge. This significant trading activity underscores the need for robust institutional infrastructure.
Asia's Shifting Crypto Focus
The digital asset landscape is evolving globally. In Asia, for example, there is a noticeable shift in investment focus. Enflux, a financial analytics firm, reports that a $600 million plan by China Renaissance's BNB Treasury highlights a new trend.
Asian capital is increasingly favoring infrastructure tokens that facilitate transaction flow over traditional store-of-value assets. This indicates a maturing market where utility and underlying technology are becoming more important than speculative value alone.
Citi's move into custody services aligns with this broader global trend towards integrating digital assets into mainstream financial infrastructure. It represents a significant step towards wider institutional adoption of cryptocurrencies.
