Citi Bets Big on Stablecoins with Coinbase Partnership and $4 Trillion Forecast

TLDR

• Citigroup has partnered with Coinbase to pilot stablecoin payment services for institutional clients, potentially becoming one of Wall Street’s first major banks to offer such services.
• The initial phase focuses on improving fiat-to-crypto fund transfers, with future plans to explore onchain stablecoin payments and 24/7 payment access.
• Citi forecasts the stablecoin market could reach $4 trillion by 2030, up from approximately $315 billion today.
• The partnership follows the passage of the GENIUS Act, which establishes a regulatory framework for stablecoins taking effect in early 2027.
• Multiple Wall Street banks including JPMorgan and Bank of America are developing stablecoin initiatives, with Citi planning to offer crypto custody services in 2026.

Citigroup announced a partnership with cryptocurrency exchange Coinbase on Monday to develop digital asset payment solutions for institutional clients. The collaboration marks a push by one of Wall Street’s largest banks into the stablecoin payment space.

The initial phase will concentrate on streamlining fiat pay-ins and pay-outs for clients. The partnership will support Coinbase’s on and off-ramps while improving payment orchestration.

Debopama Sen, Citi’s head of payments, stated that the bank’s clients are increasingly requesting programmability, conditional payments, and faster transaction speeds. Sen added that clients want round-the-clock payment access.

Sen said Citi is exploring solutions to enable onchain stablecoin payments for clients in the near future. The bank views stablecoins as an enabler in the digital payment ecosystem that will expand functionality for clients.

The move aligns with Citi’s “network of networks” strategy across 94 markets. The bank currently services 90% of the top e-commerce firms and 15 of the world’s 20 largest fintech companies.

Citi Projects Massive Stablecoin Market Growth

Citi recently raised its forecast for the stablecoin market to $4 trillion by 2030. This represents a sharp increase from the current market size of approximately $315 billion.

The stablecoin market has experienced rapid expansion over recent years. The market grew from less than $5 billion in early 2020 to over $315 billion today.

The partnership announcement comes one month after Citi updated its stablecoin market projections. The bank’s interest in digital payments extends beyond stablecoins to other offerings like Citi Token Services and USD Clearing.

Wall Street Banks Enter Stablecoin Space

The passage of the GENIUS Act earlier this year created a regulatory framework for stablecoins. The legislation takes effect in early 2027 and has prompted major banks to explore stablecoin initiatives.

JPMorgan and Bank of America are among the Wall Street institutions developing stablecoin-related services. JPMorgan CEO Jamie Dimon, previously skeptical of crypto, recently told shareholders the bank plans to be involved in stablecoin development.

Circle, the issuer of USDC, the world’s second-largest dollar-pegged stablecoin, went public earlier this year. The company’s stock surged 167% on its first trading day.

Circle currently has a market capitalization of around $35 billion. The company’s successful public debut reflects growing investor interest in stablecoin infrastructure.

Future plans for the Citi-Coinbase partnership may include exploring alternative fiat-to-stablecoin payout methods. The collaboration aims to expand 24/7 access for Citi clients moving between traditional and crypto finance.

Citi plans to offer crypto custody services in 2026 according to a CNBC report. The custody services will enable the bank to hold native digital assets like bitcoin and ether on behalf of clients.

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