Due to surging interest in cryptocurrencies from its clients, Citigroup is seriously considering offering crypto-related services.
According to Citi’s Global Head of Foreign Exchange Itay Tuchman, the bank has not yet decided whether it will offer cryptocurrency services. However, he did say that the bank was considering crypto trading, custody, and financing services for its clients.
“There are different options from our perspective and we are considering where we can best service clients,” Tuchman said.
The group would be the latest large financial institution to join the fray that already includes Goldman Sachs, BNY Mellon, and State Street.
Client interest in crypto
Tuchman noted that Citi had seen interest in bitcoin developing at a “very rapid” pace since August of last year. This interest stemmed from a wide variety of its clients, including large asset managers. Some merely requested research on the part of the bank. Meanwhile, others requested more active involvement. This included trading a range of cryptocurrencies through the bank and financing deals with cryptocurrency holdings.
“We shouldn’t do anything that’s not safe and sound,” Tuchman remarked. “We will jump in when we are confident that we can build something that benefits clients and that regulators can support,” he said. Tuchman added that Citi isn’t under any time pressure necessarily, feeling the market is still in its nascent stage. “This isn’t a space race. There is room for more than just one flag,” he added.
Citi’s bitcoin report
Citi had earlier issued a report on bitcoin in March of this year. The report titled “Bitcoin At The Tipping Point” made several observations about bitcoin and the potential for cryptocurrencies.
Citing an earlier report, it noted that bitcoin’s biggest change was shifting from being retail-focused to developing institutional interest. It added that investors were attracted to bitcoin as a hedge against inflation, primarily due to its finite supply. It also observed that more services were availing themselves to facilitate institutional entry into bitcoin.
Within the greater digital asset space, the report highlighted bitcoin as becoming its “North Star.” Its exposure and greater usage lends itself to the development of the cryptocurrency sphere as a whole. Spurring innovations such as fiat-backed stablecoins, it’s also building pressure for central banks to issue digital currencies.
The report also emphasized bitcoin’s advantages in global payments, including “its decentralized design, lack of foreign exchange exposure, fast (and potentially cheaper) money movements, secure payment channels, and traceability.”
Despite “a host of risks and obstacles that stand in the way of Bitcoin progress,” the report concluded that “Bitcoin’s global reach and neutrality could spur it to become the currency of choice for international trade.”
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