Citigroup is expanding its collaboration with Coinbase to enable its corporate clients, including major multinational companies, to accept payments in stablecoins.
How it will work. The collaboration is built around two main areas. The first concerns payment acceptance: merchants connected to Spring by Citi (the bank’s payment platform for acquiring, gateways, and settlements) will be able to accept stablecoins when processing purchases through integration with Coinbase Payments. Coinbase provides the blockchain infrastructure and payment rails, and automatically converts the received stablecoins into fiat currency. Citi acts as the bank of record and credits the funds to the client’s account. Thus, companies won’t have to store or manage cryptocurrencies themselves. According to the parties involved, this will give merchants access to more than 150 million stablecoin holders worldwide.
The second area works in reverse. Coinbase has chosen Citi Services’ Virtual Account Wallet solution—delivered via a Banking-as-a-Service model—for its Coinbase Virtual Accounts. Thanks to this, Coinbase payment service clients will gain functionality similar to a traditional bank account: they’ll be able to receive, hold, and send funds. Incoming fiat will be automatically converted into stablecoins, and the companies describe this feature as industry-first. Funds will be held on Coinbase, where USDC holders can currently earn up to 3.75% annual interest. Additionally, clients building products on Coinbase’s platform will be able to offer branded virtual accounts to their users.
What the parties are saying. Shahmir Khalik, head of the Services division at Citi, called the partnership a key step in the bank’s strategy to expand customer choice. According to him, the goal is to connect digital assets with an economy that still largely relies on sovereign currencies. Brett Teppel, head of Coinbase Institutional, noted that the collaboration will allow consumers and businesses to switch between dollars and stablecoins without leaving the traditional banking system, making cross-border payments faster and cheaper.
What’s missing so far. The launch date, fee structure, list of supported stablecoins, and expected volumes have not yet been disclosed. What’s clear is the division of roles: Coinbase is responsible for crypto infrastructure and conversion, while Citi maintains client relationships, processes merchant payments, and handles settlements.
Context. At the same time, Citi announced an expansion of its own Citi Token Services. This service runs on the bank’s internal blockchain and allows multinational companies to instantly and round-the-clock move funds within the Citi network. The partnership with Coinbase shows that stablecoins are gradually transitioning from an experimental tool to a full-fledged payment channel within traditional banking. It also intensifies pressure on other major banks: they’ll either have to forge similar partnerships or cede this market to those moving faster.