Citi May Offer Regulated Bank-Grade Custody for Stablecoins and Bitcoin ETFs, Targeting 2026

• Citi targets 2026 for a regulated institutional custody offering

• Citi will custody assets backing stablecoins and explore custody for crypto ETF holdings.

• Plan leverages Citi Innovation Labs (CIDAP) and follows the SEC’s rescinding of SAB 121; Citi has ~ $25 trillion AUC.

Citi crypto custody: Citi plans bank-grade custody for stablecoins and crypto ETFs by 2026, offering treasury-backed institutional custody — read COINOTAG’s concise update.

The Wall Street giant is building a regulated, bank-grade crypto custody service for stablecoins & ETFs, capitalizing on regulatory clarity.

By COINOTAG | Published: 2025-09-29 | Updated: 2025-10-13

What is Citi’s crypto custody plan?

Citi crypto custody is a bank-grade custody initiative intended to hold the assets that back stablecoins (cash and U.S. Treasuries) and to provide secure custody for digital assets underlying crypto Exchange-Traded Funds (ETFs). The program targets a commercial launch in 2026 and is designed for institutional clients requiring regulated, compliant custody solutions.

How will Citi custody stablecoins and crypto ETFs?

Citi plans to use its Citi Innovation Labs (CIDAP) to issue, transfer, custody, and enable programmability of tokenized assets across public and private blockchains. The firm will integrate these capabilities with treasury and cash management to permit near-instant conversion between tokenized dollars and fiat for cross-border settlement. Official Citigroup statements stress a focus on holding the traditional reserves that back stablecoins—cash and short-term U.S. Treasuries—while exploring custody of the underlying digital assets of spot crypto ETFs.

Focus on institutional digital assets

A senior Citigroup executive described the strategy as prioritizing custody of the assets that secure stablecoins, and secure management of funds backing crypto ETFs. The plan is positioned to serve institutional use cases, where clients require regulated custody, reconciled treasury accounting, and integrated settlement. Citi’s scale—approximately $25 trillion in assets under custody (AUC)—is a central factor in its market entry strategy.

Leveraging existing infrastructure

Citi will build on CIDAP to enable issuance, transfer, custody, and programmability of tokenized instruments. CIDAP is already in use for 24/7 tokenized U.S. dollar transfers between financial centers including New York, London, and Hong Kong. By linking tokenized dollar movements to traditional treasury services, Citi aims to reduce friction in cross-border payments and settlement—using tokenization to address speed and cost inefficiencies found in legacy systems.

The race for digital custody

The rescinding of SAB 121 by the Securities and Exchange Commission (SEC) removed a key accounting barrier that had limited U.S. banks from providing digital asset custody. With that regulatory change, Citi is preparing to enter a market largely occupied by crypto-native custodians. Amit Agarwal, Citi’s Head of Custody, said the future of post-trade is “instant,” underlining the bank’s focus on modernizing infrastructure as traditional custody and digital asset services converge.

Frequently Asked Questions

Will Citi custody the tokens or the underlying reserves for stablecoins?

Citi’s stated approach prioritizes custody of the underlying reserves—cash and U.S. Treasuries—supporting stablecoin stability, while also exploring direct custody and secure management of tokenized assets themselves for institutional clients. The model emphasizes regulatory compliance and treasury integration.

When can institutions expect Citi’s custody service to be available?

Citi has signaled a target timeline of 2026 for a commercial offering, following continued development of CIDAP and regulatory alignment after the SEC rescinded SAB 121.

Key Takeaways

• Citi aims for regulated, bank-grade custody: The service focuses on assets backing stablecoins and custody for crypto ETF holdings.
• Infrastructure synergy: CIDAP will connect tokenized asset capabilities with treasury and cash management for near-instant settlement.
• Market and regulatory context: The SEC rescinding of SAB 121 and Citi’s $25 trillion AUC create a foundation for entry by 2026; institutions should evaluate integration and compliance pathways now.

Conclusion

Citi’s move to build a crypto custody capability for stablecoins and ETF-related digital assets reflects both regulatory shifts and the bank’s effort to extend institutional treasury services into tokenized markets. With CIDAP and a 2026 target, Citi seeks to offer a compliance-first custody option that bridges traditional reserves and digital settlement. Watch for formal product details and custodial terms as development progresses; institutions should assess operational and compliance readiness accordingly.

Also Read: Citi Ventures Invests in BVNK Stablecoin Platform

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TAGGED:Crypto ETFsStablecoin