Citi and Coinbase Partner on Stablecoin Infrastructure for Corporate Clients

Citigroup has teamed up with Coinbase, the largest cryptocurrency exchange in the U.S., for its newest blockchain initiative.

In a joint statement on Monday, the firms announced a collaboration that would let Citi customers switch between fiat currency and stablecoins without needing to run separate banking and crypto infrastructures.

The news arrives as banks around the globe adopt Bitcoin's underlying technology to accelerate operations and serve clients seeking cryptocurrency exposure.

Last month, Citi announced it would enable institutional investors to hold both conventional assets and bitcoin in a single framework, eliminating the need for separate systems, later this year.

“Our clients operate in an increasingly fast-paced and complex global economy, and we’re focused on delivering the solutions they need,” said Debopama Sen, Head of Payments, Services, Citi.

“Our goal is to build the next generation of payments infrastructure — one that is seamless, interoperable, and operates across both traditional and digital payments instruments and networks.”

According to the announcement, the deal has two components. First, Coinbase Virtual Accounts, which are built on Citi's banking-as-a-service platform, will offer Coinbase's payment customers bank-account-like functions for accepting, holding, and sending funds. Citi will supply the regulated banking infrastructure to automatically convert incoming fiat into stablecoins.

Second, Citi's merchant platform Spring by Citi will leverage Coinbase's infrastructure to allow Citi's corporate clients to accept stablecoin payments at checkout. Coinbase will convert the stablecoins into fiat, and Citi will settle the funds, meaning merchants never need to directly hold or manage cryptocurrency.

“Fintechs building on Coinbase have always needed a fast, compliant bridge between fiat and stablecoins, and Citi gives us that at scale,” said Alec Lovett, Coinbase's Head of Infrastructure Product.

Coinbase and Citi initially revealed a partnership last year aimed at improving digital asset payment capabilities for institutional clients.

Citi offers several blockchain services, such as Citi Token Services, which facilitates real-time cross-border payments through tokenized deposits.

Since last year, Citi has also been collaborating with other major banks, including Deutsche Bank, Goldman Sachs, and Bank of America, to investigate the issuance of a stablecoin product.