Citi Sets 2026 Target for Crypto Custody Service as Wall Street Expands Digital Asset Ambitions

Bank Eyes Stablecoin Integration and Institutional Demand Under Evolving U.S. Regulatory Landscape

TL;DR:

• Citi plans to launch a crypto custody service in 2026 after two to three years of development.
• The bank is exploring both in-house and third-party custody solutions while also assessing stablecoin opportunities.
• A more favorable U.S. regulatory climate, including the GENIUS Act, is accelerating major banks’ entry into digital assets.

According to CNBC, Citi is preparing to roll out a crypto asset custody service by 2026, marking one of Wall Street’s most direct moves yet into the digital asset economy. The initiative, led by Biswarup Chatterjee, Citi’s global head of partnerships and innovation within its services division, reflects a multiyear strategy to integrate digital assets into the bank’s core institutional infrastructure. Chatterjee said the project has been under development for the past two to three years and could be ready for market within “the next few quarters,” describing the effort as a credible custody solution for asset managers and institutional clients seeking regulated digital asset storage.

The custody system is designed to allow Citi to hold native cryptocurrencies such as Bitcoin and Ether directly, a significant shift from the bank’s previous stance of offering only tokenized or indirect exposure. Chatterjee emphasized a flexible technology approach that combines internal development with external partnerships. Some asset classes will rely on Citi’s in-house custody infrastructure, while others may use third-party or hybrid solutions that can move faster and serve specific client segments. “We may have certain solutions that are completely designed and built in-house,” Chatterjee told CNBC. “We’re not currently ruling out anything.”

The timing aligns with a broader regulatory turn in the United States. Under the Trump administration, new legislation such as the GENIUS Act has established clearer guidelines for stablecoins and digital asset operations, giving banks the confidence to enter the space. The easing of previous restrictions—such as the withdrawal of Staff Accounting Bulletin 121—has also paved the way for federally regulated institutions to reengage with digital custody and tokenization. This shift has reignited competition among traditional banks including State Street, JPMorgan, and Bank of America, all of which are advancing their own blockchain strategies.

Citi’s custody service will operate under the same stringent standards that govern its traditional asset operations, which already oversee around $25 trillion globally. The model focuses on securing client assets against cyber threats while maintaining full compliance with anti-money laundering and know-your-customer regulations. Chatterjee acknowledged that all forms of digital custody carry risk but argued that heavily regulated banks are best equipped to safeguard clients’ holdings due to decades of experience in asset security and fiduciary oversight.

Alongside custody, Citi is evaluating the potential of stablecoins as both a business and infrastructure opportunity. The bank is still in the early stages of research but views stablecoins as a practical payment and settlement mechanism, particularly in emerging markets with underdeveloped banking systems. Chatterjee said demand for such solutions often comes from corporate clients expanding into regions where traditional banking access is limited. “We do recognize the fact that there are these pockets in the world where you have a commercial need from our clients to be there and do business,” he said.

Citi’s interest in the stablecoin sector became more visible after it invested in London-based stablecoin infrastructure firm BVNK last week, signaling a deeper commitment to the technology underpinning blockchain-based payments. The investment positions the bank to explore custody, issuance, and reserve management for stablecoins backed by high-quality assets such as cash and U.S. Treasuries. The bank’s existing “Citi Token Services” platform, which enables real-time tokenized transfers between hubs like New York, London, and Hong Kong, already demonstrates its capacity to manage 24/7 settlement systems—a foundation that could eventually support stablecoin operations.

Peers are moving along similar paths but with varied strategies. JPMorgan continues to develop its deposit token system on the Ethereum network to allow around-the-clock money transfers but has stated it will not custody crypto assets directly. Bank of America CEO Brian Moynihan confirmed in July that his firm is also working on a stablecoin concept. JPMorgan’s global head of markets digital assets, Scott Lucas, said there is “a real opportunity” to respond to client demand for digital cash solutions while leveraging blockchain rails for liquidity management.

The renewed push by U.S. megabanks into custody and tokenized payment systems represents a second wave of institutionalization for digital assets—one focused less on speculative trading and more on infrastructure integration. The shift coincides with growing institutional demand tied to exchange-traded products and the expanding stablecoin market, which analysts project could reach $3.7 trillion by 2030 from roughly $250 billion today.

Citi’s announcement generated cautious optimism among investors, lifting its shares about 1.8% in pre-market trading as markets responded to the prospect of new digital revenue lines. For Chatterjee and his team, the message is clear: as the boundaries between traditional and digital finance continue to blur, Citi intends to be not just a participant but a gatekeeper. “We’re hoping that in the next few quarters, we can come to market with a credible custody solution,” he said—a statement that encapsulates Wall Street’s accelerating convergence with the crypto economy.

This article has been refined and enhanced by ChatGPT.