Citigroup Inc (NYSE:C) is considering offering custody and payment services for stablecoins, and protecting the underlying assets of cryptocurrency ETFs.
The Wall Street banking titan is considering
- Citigroup stock has gain more than 35% this year. Track its prices live.
According to Reuters, the move would be one of the most significant forays by a legacy financial institution into the crypto custodial space, an area dominated primarily by digital-first companies such as Coinbase Global Inc (NASDAQ:COIN). The change could have ripple effects across blockchain infrastructure-linked ETFs, fintech innovations, and crypto-centric platforms.
ETFs That Could Benefit
- Blockchain Infrastructure ETFs: Vehicles such as the Amplify Transformational Data Sharing ETF (NYSE:BLOK) and the Global X Blockchain ETF (NASDAQ:BKCH) would also gain from greater investor trust in crypto custody security and authenticity. The presence of Citi would indicate institutional support for blockchain as a fundamental financial service.
- Fintech and Payment ETFs: The Global X FinTech ETF (NASDAQ:FINX) and the ARK Fintech Innovation ETF (BATS:ARKF) may benefit from tailwinds if Citi embeds stablecoin payment rails in its general banking operations, increasing exposure for payment-focused disruptors.
- Bitcoin and Ethereum ETFs with Diversified Custodians: ETFs that hold significant cryptocurrencies but are not solely dependent on Coinbase for custody may stand to gain the most from attracting inflows of money from traditional bank reassurance-seeking investors.
ETFs That Could Feel The Pressure
- Coinbase-Tied ETFs: Funds with heavy exposure to Coinbase, such as the VanEck Digital Transformation ETF (NASDAQ:DAPP) and Bitwise Crypto Industry Innovators ETF (NYSE:BITQ), might face headwinds if Citi's entry erodes Coinbase's dominant market share in ETF custody.
- Niche Crypto Service ETFs: ETFs concentrating on smaller, specialized custody or payment providers could see market share shift toward Citi-backed infrastructure.
Why This Matters For The ETF Market
Custody forms the base of an ETF trust. Investors expect that underlying assets, especially digital ones, are held securely, with minimal counterparty risk. Citi's potential role in the space would introduce a high-regulation, globally recognized player into a market that has faced questions over security, insurance, and operational resilience.
For stablecoins, Citi's custody services could offer an additional layer of transparency and credibility, potentially accelerating adoption in mainstream payments and settlement systems. That, in turn, could fuel growth in ETFs tied to blockchain-enabled finance.
Market Context
Currently, Coinbase dominates U.S. crypto ETF custody, particularly for spot bitcoin ETFs that were cleared earlier this year. Adding a banking giant like Citi into the mix might create competition, mitigate concentration risk, and even decrease custody fees in the future.
Institutional participation has been a recurring theme in crypto markets in 2025, with traditional asset managers, clearinghouses, and banks rolling out services aimed at bridging the gap between legacy finance and digital assets. Some analysts are seeing Citi's potential move as the next logical step in that integration.
The Bottom Line
If Citi enters the stablecoin custody and crypto ETF protection business, the move has the potential to reshape the competitive landscape for ETF providers. Blockchain infrastructure and fintech ETFs may benefit from a wave of institutional legitimacy, while funds that are heavily dependent on Coinbase for safekeeping may face tougher competition. For investors, the disruption could create new doors for exposure to the digital asset universe.
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