Citigroup is partnering with Coinbase, the largest cryptocurrency exchange in the United States, for its newest decentralized ledger initiative.
In a shared press release on Monday, the two organizations announced their collaboration to enable Citi customers to transition between traditional currency and stablecoins without requiring them to independently construct or operate separate financial and digital asset architectures.
This disclosure arrives as financial institutions globally leverage the foundational technology of Bitcoin to accelerate transactions and serve cryptocurrency-enthusiastic clientele.
Last month, Citi revealed plans to permit institutional investors later this year to store both conventional assets and bitcoin within a single architecture, eliminating the requirement for distinct setups.
“Our clients operate in an increasingly fast-paced and complex global economy, and we’re focused on delivering the solutions they need,” stated Debopama Sen, Head of Payments and Services at Citi.
“Our goal is to build the next generation of payments infrastructure — one that is seamless, interoperable, and operates across both traditional and digital payments instruments and networks.”
The partnership consists of two distinct components, according to the announcement. First, Coinbase Virtual Accounts, developed upon Citi’s banking-as-a-service infrastructure, will supply Coinbase payments users with functionalities similar to traditional bank accounts, enabling them to receive, store, and transfer capital. Citi will deliver the compliant financial foundation so that incoming government-issued currency can be automatically swapped into stablecoins.
Second, Citi’s merchant gateway, known as Spring by Citi, will integrate Coinbase’s architecture to allow Citi’s corporate customers to accept stablecoin transactions at the point of sale. Coinbase will exchange the stablecoins for traditional money, and Citi will clear the capital, ensuring merchants never need to maintain or administer digital assets directly.
“Fintechs building on Coinbase have always needed a fast, compliant bridge between fiat and stablecoins, and Citi gives us that at scale,” remarked Alec Lovett, Head of Infrastructure Product at Coinbase.
Coinbase and Citi initially disclosed last year that they would join forces to upgrade digital asset transaction features for institutional accounts.
Citi maintains several blockchain-based products, such as Citi Token Services, which facilitates instantaneous international transfers through tokenized bank deposits.
Furthermore, since last year, the institution has collaborated with other major lenders — including Deutsche Bank, Goldman Sachs, and Bank of America — to investigate the creation of a stablecoin offering.
Originally published at https://bitcoinmagazine.com/news/citi-coinbases-stablecoin-project.
