- •Citi plans direct custody of native crypto assets for institutional clients by 2026.
- •Regulatory rollbacks and the GENIUS Act cleared hurdles for bank-led asset custody.
- •Stablecoin trial and global partnerships position Citi for broader digital asset adoption.
Citibank is preparing to enter the crypto custody market in 2026 after building infrastructure for nearly three years, as per comments made by Biswarup Chatterjee, the bank’s global head of partnerships and innovation in its services division.
The project began in the United States and aligns with regulatory changes under President Donald Trump’s administration, including crypto legislation like the GENIUS Act. Citi’s plan centers on holding native digital assets directly for institutional clients, a change in how traditional banks approach custody.
Dual-Track Build Targets Institutional Demand
Chatterjee said Citi has advanced development of its custody platform with a mix of in-house architecture and third-party technology. He explained that some asset classes will rely on internally built systems, while others could use lightweight external custody tools.
These two approaches aim to accommodate different client segments without locking the bank into a single framework. The service is designed to support native cryptocurrencies rather than tokenized representations or indirect exposure.
The decision separates Citi from peers that rely mainly on fintech custody partners. Institutions like BNY Mellon, Deutsche Bank and Standard Chartered have already begun building or piloting similar services, which positions Citi among early big banks preparing to manage digital holdings directly. The move also may lead to potential competition with custodians such as State Street and BNY Mellon, who already serve asset managers exploring broader crypto exposure.
Regulatory Outlook Influences Bank Strategy
Recent government decisions have made it easier for banks to join the digital asset market. The Federal Reserve, FDIC, and the Office of the Comptroller of the Currency removed earlier rules that forced banks to seek approval before offering crypto services.
This change now allows regulated banks to deal with digital assets more freely. The GENIUS Act also set up clear rules for stablecoins and similar products, letting banks issue, trade, and safely hold them.
Treasury Secretary Scott Bessent has said the law could expand the digital asset market to $2 trillion. Citi’s custody preparations coincide with broader work on tokenized deposits and blockchain-based settlement.
The bank’s Citi Token Services initiative already uses distributed ledger technology for cross-border transfers. Other institutions have moved in the same way. JPMorgan is advancing development of a deposit token built on Ethereum but has ruled out holding client crypto.
Scott Lucas, JPMorgan’s global head of markets digital assets, said on CNBC that custody is not part of the bank’s near-term strategy. He cited risk appetite and regulatory exposure as reasons for maintaining distance from direct asset holding. The firm is, however, exploring stablecoin services in response to client demand.
Stablecoin Interest Expands Alongside Custody Plans
Citi is evaluating stablecoin applications in regions where clients face limited access to formal banking and payment systems. Chatterjee said digital tokens pegged to fiat could support operations in markets where traditional financial channels remain underdeveloped.
The bank has already invested in stablecoin infrastructure provider BVNK through Citi Ventures. Meanwhile, JPMorgan, BNP Paribas, Bank of America, and nine other institutions announced plans to explore a reserve-backed stablecoin project.
Citi intends to join a consortium of European banks developing a regulated euro-based token scheduled for the second half of 2026. These efforts coincide with crypto custody planning and suggest an expansion into multiple blockchain-based financial services.
Citigroup’s Scott Chronert, the bank’s U.S. equity strategist, said institutional interest in Bitcoin and Ethereum is strong heading into 2026. He pointed to those assets as hedge options for investors who hold equities.
This outlook aligns with the bank’s preparations to support crypto holdings through custody rather than only through tokenized or synthetic exposure. The custody buildout also shows increasing interest from asset managers, hedge funds and family offices seeking regulated platforms.
Those groups have cited private key management, on-chain verification and wallet security as central requirements. Industry analysts note that trusted custody infrastructure will determine how banks get institutional demand over the next two years.
The project’s timing may align with improving regulatory clarity around digital securities and tokenized assets. Competitors like Standard Chartered and Deutsche Bank have already launched custody pilots in Europe and Asia, where digital asset oversight is more defined.
Citi’s global footprint could enable it to deploy services in multiple jurisdictions if licensing and technology standards align. A final rollout will determine how Citi balances internal systems with external tools and how it sees ongoing developments in oversight.
The bank has not announced which assets will be supported first, but analysts expect Bitcoin and Ethereum to anchor the initial offering. Expansion into tokenized securities and stablecoins could follow as client demand and regulation grow.
Meanwhile, Citi’s plan is a turning point in how large U.S. banks prepare to manage native digital assets. The effort brings institutional custody closer to traditional banking infrastructure and introduces new competition among legacy custodians. Upcoming service details, regulatory adjustments and client adoption will influence the bank’s final rollout.