Citigroup claims to be exploring stablecoin adoption amidst accelerated regulations in the United States and Hong Kong to accommodate. How far are they willing to dive?
Summary
- Citigroup seeks to offer stablecoins services and provide on-ramp and off-ramp services for clients.
- Banks are growing more eager to pursue stablecoin services as regulatory terms become clearer in regions like Hong Kong and the U.S.
Major financial institutions are now seeking opportunities to benefit from the current stablecoin wave that’s been sweeping the globe. Companies in Hong Kong and the United States have expressed interest in issuing their own stablecoins pegged to local currencies.
The global banking firm Citigroup is no exception. In a recent earnings call, CEO Jane Fraser said to stakeholders that the bank is currently aiming to delve deeper into stablecoins and digital assets in order to fulfill clients’ needs. In addition, the bank also hopes to attract new clients and unlock new revenue streams through stablecoins.
These comments are reaffirmed by New York-based head of services at Citigroup, Shahmir Khaliq in an interview with South China Morning Post. The executive called stablecoins a “global phenomenon,” especially with recent developments in the United States and Hong Kong’s own Stablecoin Ordinance bill that is scheduled to come into effect on August 1.
“We welcome regulators providing us guidance and insight on the stablecoin landscape, allowing us to continue developing new services that help our clients run their businesses every day,” said Khaliq.
How far do you think banks are willing to go to embrace stablecoins?
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Citigroup’s future plans involving stablecoins
Earlier this year, the banking group expressed interest in offering technology-based services and the issuance of what they called a “Citi stablecoin.” Recently, it has also stated that its plans to help clients navigate reserve management as stablecoins require backing its value in reserves.
It would also offer services that could convert stablecoins into fiat currencies and vice versa.
“Consumers and companies will have multiple payment options, and ultimately, the adoption of stablecoins will depend on factors like cost and ease of access,” he said, adding that banks are able to provide the bridge between stablecoins and fiat.
Although the bank is undoubtedly curious about stablecoins and how they will be able to make use of them, it is also taking a cautious stance as it observes the need for “clear accounting rules regarding stablecoins and their impact on balance sheets and liquidity” according to Khaliq.
He believes that there is still a long way to go before true regulatory clarity can be achieved in terms of stablecoins, stating that it is still “very early” in its development.
Back in April 2025, Citigroup’s latest report showed that stablecoin issuers are poised to become some of the largest holders of U.S. Treasuries by 2030 if the U.S. adopts a regulatory framework. Now that it has, only time will tell if it will reach the predicted $1 trillion surge in additional demand for U.S. Treasuries.
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The stablecoin regulatory wave
Most recently, the Trump Administration passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act or GENIUS Act. It received majority vote from the House of Representatives on July 18. The bill is aimed at providing the first federal framework for stablecoins.
Hong Kong is next in line. The special administrative region recently passed the Stablecoin Ordinance, which mandates companies to register for a stablecoin issuance license in order to offer services and issue stablecoins pegged to the Hong Kong dollar. It is scheduled to come into effect on August 1.
Even China has begun to mull over softening its stance on digital assets as more and more countries are competing to issue their own stablecoins linked to local currencies, in an attempt to overthrow USD-pegged stablecoin dominance.
Read more: Chinese state-owned firms tasked with studying stablecoin launch feasibility: report
