Citi taps Coinbase to help big clients accept stablecoin payments: WSJ
One of the world's largest banks is teaming up with the biggest US crypto exchange to build a bridge between traditional finance and digital assets.
Citi is deepening its partnership with Coinbase to expand digital asset payment capabilities for its institutional clients.
The Wall Street bank is working with the major crypto company to bring stablecoin payments into its merchant-processing services, The Wall Street Journal reported Monday. The move will allow major institutional clients such as multinational corporations to accept digital tokens from customers at checkout.
According to the report, Coinbase will provide the payment rails and blockchain infrastructure, automatically converting stablecoins into government-issued currency, while Citi will settle the proceeds as the bank of record.
The arrangement also gives Coinbase payments customers access to Citi’s banking capabilities for accepting, holding and paying funds through a bank-account-like structure. Incoming cash can be automatically converted into US dollar-pegged stablecoins, which will be held at Coinbase and currently earn a 3.75% annual reward.
Citi’s Shahmir Khaliq said the partnership is expected to connect digital assets with economic activity that still operates primarily in government-issued currencies.
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Coinbase and Citi first unveiled their partnership last October, with plans to collaborate on digital asset payment capabilities for Citi’s institutional clients.
The banking giant began its digital asset push in June 2021 with the creation of a Digital Assets Group within its wealth division.
Citi’s early efforts included digital custody frameworks and blockchain-based bond infrastructure, followed by the launch of Citi Token Services. The platform uses tokenized institutional deposits to support 24/7 cross-border liquidity and automated trade finance and has expanded to seven global markets.
Citi has expanded Citi Token Services to Japan and the United Arab Emirates, giving multinational clients 24/7 access to instant liquidity transfers across its network. The blockchain-based platform is now available in seven jurisdictions, including the US.