Citigroup Dives Deep into the Stablecoin Craze: How Far Will They Go?

Hang on to your hats, folks! Citigroup is jumping headfirst into the wild world of stablecoins as regulations crank up in the US and Hong Kong. But just how deep are they willing to dive into this digital ocean?

Big banks are scrambling to catch the stablecoin wave that's been crashing around the globe. Companies in Hong Kong and the US are itching to launch their own stablecoins, all tied to their local cash.

And guess what? Citigroup isn't sitting on the sidelines. In a recent earnings call, CEO Jane Fraser told stakeholders that they're ready to explore stablecoins and digital assets like never before. They're gunning to meet their clients' needs and snag new ones, all while opening up fresh revenue streams.

Shahmir Khaliq, Citigroup's head of services in New York, echoed this excitement in a chat with South China Morning Post. He called stablecoins a "global phenomenon," especially with the US and Hong Kong's new Stablecoin Ordinance bill, set to hit on August 1.

"We're all in for regulators guiding us through this stablecoin jungle. It lets us keep building new services that help our clients keep their businesses humming," Khaliq said.

So, how far do you think banks will go to embrace these digital bucks?

Citigroup's Big Plans for Stablecoins

Earlier this year, Citigroup was already talking about tech services and their own "Citi stablecoin." Now, they're also planning to help clients handle reserve management, since stablecoins need real value backing them up.

They're also gearing up to swap stablecoins for fiat and back again.

"People and businesses will have tons of payment options. The adoption of stablecoins will hinge on cost and ease of use," Khaliq said, adding that banks can be the bridge between stablecoins and real cash.

While Citigroup is buzzing about stablecoins, they're also playing it cool, waiting for clear rules on how stablecoins affect their books and cash flow, according to Khaliq.

He thinks we're still miles away from clear regulations on stablecoins, saying it's "very early" in the game.

Back in April 2025, Citigroup's report predicted stablecoin issuers could be the biggest holders of US Treasuries by 2030 if the US got its regulatory act together. Now that it has, will we see that $1 trillion surge in demand for US Treasuries?

The Stablecoin Regulatory Wave

Just recently, the Trump Administration pushed through the GENIUS Act, getting a thumbs up from the House of Representatives on July 18. It's the first federal framework for stablecoins in the US.

Hong Kong is hot on their heels. Their Stablecoin Ordinance mandates companies to get a license to issue stablecoins tied to the Hong Kong dollar, effective August 1.

Even China is starting to rethink its hardline stance on digital assets as countries race to launch their own stablecoins, aiming to dethrone USD-pegged stablecoin dominance.