Citi and Coinbase team up on stablecoin payments infrastructure
Citigroup and Coinbase will let Citi clients move between fiat and stablecoins without running their own banking and crypto systems, the firms said in a joint statement.
Key points
- Citi and Coinbase announced the partnership in a joint statement on Monday.
- Coinbase Virtual Accounts, built on Citi's banking-as-a-service platform, will give Coinbase payments customers bank-account-like features.
- Citi's merchant platform Spring by Citi will use Coinbase infrastructure so enterprise clients can accept stablecoin payments at checkout.
- Coinbase converts stablecoins to fiat and Citi settles the funds, so merchants never hold crypto directly.
- Citi said last month it would let institutional investors custody traditional assets and bitcoin in one framework later this year.
Citigroup is working with Coinbase on stablecoin payments infrastructure for businesses, the two companies said in a joint statement on Monday. The Citi and Coinbase stablecoin project is designed to let Citi clients move between regular money and stablecoins without having to build or manage both banking and crypto systems themselves.
The announcement is the latest example of large banks using Bitcoin's underlying technology to speed up their processes and serve customers interested in crypto. Citi said last month that it would allow institutional investors to custody both traditional assets and bitcoin within a single framework later this year, rather than needing separate systems.
According to the joint statement, the deal has two parts. First, Coinbase Virtual Accounts, built on Citi's banking-as-a-service platform, will give Coinbase's payments customers bank-account-like features so they can accept, hold and send funds. Citi will provide the regulated banking backbone so incoming fiat can be automatically converted to stablecoins.
Banks bridge fiat and crypto
Second, Citi's merchant platform, Spring by Citi, will use Coinbase's infrastructure so Citi's enterprise clients can accept stablecoin payments at checkout. Coinbase will convert the stablecoins to fiat and Citi will settle the funds, meaning merchants never have to hold or manage crypto directly.
Debopama Sen, Head of Payments, Services at Citi, said the bank's clients operate in an increasingly fast-paced and complex global economy and that it is focused on delivering the solutions they need. She said the goal is to build the next generation of payments infrastructure that is seamless, interoperable and works across traditional and digital payment instruments and networks.
Alec Lovett, Coinbase's Head of Infrastructure Product, said fintechs building on Coinbase have always needed a fast, compliant bridge between fiat and stablecoins, and that Citi provides that at scale. The two firms first announced last year that they would partner to enhance digital asset payment capabilities for institutional clients.
Two parts to the deal
Citi has several blockchain offerings, including Citi Token Services, which enables real-time cross-border payments using tokenised deposits. Since last year it has also worked with other major banks, among them Deutsche Bank, Goldman Sachs and Bank of America, to explore issuing a stablecoin product.