Citi Calls Stablecoins “Clunky” but Builds Ways to Use Them
Citi CEO Jane Fraser says the bank sees more client growth in tokenized deposits than in stablecoins. Her point is not that businesses have no use for stablecoin payments; it is that treasury transfers, merchant acceptance and cross-bank settlement are different jobs.
Key Takeaways
- Fraser said stablecoins can be “clunky” for Citi’s corporate clients.
- Citi Token Services moves bank money without requiring wallets or token holdings.
- Spring merchants can accept stablecoins and receive fiat settlement.
- Cross-bank tokenized-deposit transfers remain in a controlled pilot phase.
On Citi’s October 13 earnings call, Fraser said stablecoins can be harder for the bank’s corporate client base to use across borders because of compliance, accounting and tax requirements.
“We see less activity on stablecoins, honestly, given the nature of our client base. Stablecoins can be a bit more clunky, with more complexity around compliance, accounting and tax when moving money around the world, whereas tokenization provides the easiest way to do it.”
The comments, recorded on page 16 of Citi’s third-quarter earnings transcript, describe demand among its clients rather than the entire stablecoin market. Citi is also building services that let businesses reach stablecoin users without requiring every merchant or treasury team to hold the tokens themselves.
Why Citi favors tokenized deposits for treasury transfers
Citi Token Services is designed for clients moving liquidity between participating Citi branches on a 24/7 basis. The service’s FAQ says clients do not need a wallet, blockchain node or tokens: they initiate payments through existing Citi accounts while the bank manages the blockchain infrastructure.
That setup addresses a familiar treasury task. A company moving dollars between operating entities needs the receiving entity to have usable funds, with approved payment instructions and records that fit into existing accounting and reconciliation processes. Faster movement is valuable only if the surrounding banking workflow still works.
Fraser said Citi Token Services and deposit tokenization were operating in seven markets and connected with Citi’s 24/7 clearing capabilities. She also referred to connections with 300 peer banks, but that figure relates to Citi’s clearing network; it does not mean 300 banks are using Citi Token Services itself.
Stablecoin acceptance serves a different purpose
Citi’s work with Coinbase addresses merchants receiving payments from customers who choose to use stablecoins. The stablecoin feature added to Spring by Citi lets institutional merchants access that demand through an existing payments platform.
Under the arrangement described in Coinbase’s September 28 announcement, Coinbase converts the digital currency into fiat and Citi settles the funds as bank of record. The service is launching first in the United States.
The customer can pay in stablecoins while the merchant receives conventional currency. That removes the need for a business to custody tokens or decide whether to retain them on its balance sheet after each sale.
It does not suit every use case. A business that needs to retain and spend stablecoins on public networks would need a different arrangement, because automatic conversion into fiat removes the token from the payment flow.
Cross-bank tokenized money still needs a settlement route
Transfers within Citi’s own network do not solve the broader problem of sending money to a supplier, subsidiary or counterparty using another bank. That is the purpose of Citi’s work with other institutions on Swift’s Digital Ledger.
The DBS–Citi weekend dollar-payment test showed one possible route. DBS said its September 5 payment with Citi’s New York office used tokenized deposits through Swift’s Digital Ledger and took minutes.
The model separates two steps that can sound identical in a headline. Swift’s ledger provides instant payment commitment using tokenized deposits, while final settlement can still rely on established mechanisms, including real-time gross settlement. Citi describes the initiative as a controlled proof-of-concept phase running from July through December 2026, rather than a broadly available cross-bank product.
| Payment need | Citi-linked route | What the business receives |
|---|---|---|
| Move liquidity between participating Citi accounts | Citi Token Services | Bank-account funds through Citi-managed infrastructure |
| Accept a customer’s stablecoin payment | Spring by Citi with Coinbase | Fiat settlement after conversion |
| Move tokenized deposits between banks | Citi–DBS work on Swift’s Digital Ledger | A proof of concept combining ledger commitment with established final settlement |
Citi is not choosing one form of digital money for every task
Fraser’s comments make most sense in this product context. Tokenized deposits allow Citi clients to move bank money within a familiar account structure. Stablecoin acceptance gives merchants a way to serve customers who prefer digital-currency payments without exposing the merchant to the token itself.
The cross-bank model is less mature: its value depends on more participating institutions, currencies and settlement arrangements. Citi’s strategy is therefore not a simple rejection of stablecoins. It is an attempt to match each form of digital money to a specific payment task—and to keep corporate clients connected to the bank’s own payment infrastructure throughout the process.
This article is provided for informational purposes only and does not constitute financial, legal or tax advice. Product availability and payment terms vary by jurisdiction and client eligibility.
Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP. Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem. To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem. His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.
