- Citi to launch digital asset custody for institutional clients by 2026.
- Secure, regulated custody solutions targeting asset managers and tokenized projects.
- Digital asset custody services aim to address cyberattack and security risks.
According to a recent update, Citi is preparing to launch its digital asset custody service in 2026, marking its entry into the growing sector of institutional digital asset services. This move comes at a time when more mainstream banks are increasingly exploring cryptocurrency-related services.
Citi’s goal is to offer a secure, regulated, and segregated framework for holding Bitcoin, Ether, and other digital assets on behalf of institutional clients.
Citi has been working on developing this service for several years, as revealed by Biswarup Chatterjee, Citi’s global head of partnerships and innovation. The bank plans to target asset managers first, especially since their mandates often require custodians who are large, regulated, and capable of meeting high security standards.
The rising demand for secure, audited safekeeping of digital assets is propelling this initiative forward, as tokenization projects, which were once in the pilot stage, are now transitioning into production with traditional financial players.
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Tailored Custody Solutions and Risk Management
Citi’s custody offering will include solutions for different asset types, including core digital assets and more specialized tokens. In-house technology will be utilized to manage core assets, while third-party integrations will facilitate the management of more specialized tokens. The bank is also focusing on stablecoin exploration as part of a broader strategy to build a comprehensive digital asset infrastructure, complementing traditional deposit-token systems.
When it comes to operational security, Citi plans to address key challenges in crypto custody, notably the risk of cyberattacks and theft. While the bank’s existing history of custodial services for traditional financial assets may give it an edge, the development of advanced technologies will be crucial in ensuring a high level of security. Citi is focusing heavily on key management, disaster recovery, and institutional-level reporting to mitigate these risks.
Citi’s Strategic Approach in a Growing Market
Citi’s venture into crypto custody services aligns with a wider industry trend as more financial institutions explore digital assets. Banks like Banco Santander, Bank of America, and Deutsche Bank are also entering this space, with a particular focus on stablecoins. However, not all banks are on the same page.
While Citi is actively advancing its services, JPMorgan remains more cautious about offering crypto custody solutions, even though the bank allows clients to purchase cryptocurrencies.
This push into the digital asset sector by Citi and other major players signals the increasing acceptance of cryptocurrencies and blockchain technology in traditional finance, setting the stage for wider adoption.
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