Citi will power Coinbase Virtual Accounts and let merchants accept stablecoin payments through Spring by Citi. The services launch first in the U.S.
Citi and Coinbase announced an expanded collaboration that will let corporate and institutional clients use stablecoin payments without building or managing separate blockchain infrastructure.
The two companies said the initiatives will launch first in the United States. Citi described them as part of its broader digital assets strategy, which aims to connect traditional financial infrastructure with digital networks across cash management, securities and collateral.
Two initiatives
Coinbase Virtual Accounts. Coinbase selected Citi’s Virtual Account Wallet, part of Citi Services’ Banking-as-a-Service offering, to power Coinbase Virtual Accounts. The accounts give Coinbase’s payments customers bank-account-like functionality to accept, hold and pay funds. Incoming fiat currency is automatically converted into stablecoins, which the companies described as an industry first.
Merchant stablecoin acceptance. Citi will let its institutional clients accept stablecoin payments at checkout through Spring by Citi, its payment acceptance platform. Coinbase Payments powers the stablecoin acceptance. The system automatically converts digital currency into fiat, and Citi settles the funds as the bank of record. The companies said this lets merchants serve more than 150 million stablecoin holders worldwide without holding or custodying digital assets.
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What the executives said
“This partnership with Coinbase is a pivotal step in our ongoing Services strategy to provide optionality for our clients,” said Shahmir Khaliq, head of Services at Citi. “We provide regulated, bank-grade solutions that remove significant hurdles for clients who want to engage in the digital economy.”
Ashish Bajaj, head of Services for North America at Citi, said the goal is to build payments infrastructure that is “seamless, interoperable, and operates across both traditional and digital payments instruments and networks.”
Alec Lovett, head of infrastructure product at Coinbase, said clients building on Coinbase have long needed “a fast, compliant bridge between fiat and stablecoins.” He said Citi’s regulated banking infrastructure gives businesses bank-account-like functionality “with the speed of stablecoins underneath it.”
Brett Tejpaul, head of Coinbase Institutional, said the collaboration gives Coinbase customers bank-grade fiat infrastructure and gives Citi’s clients low-friction stablecoin acceptance, “without either side needing to build or manage a system they don’t need.”
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Citi’s payments push
Citi said it moves about $6 trillion a day and is using tokenization and blockchain technology to build new payments services. Those include Spring by Citi, its Banking-as-a-Service offering and a newly integrated 24/7 USD Clearing and Citi Token Services product for real-time, round-the-clock cross-border dollar payments.
The bank also said it banks 90% of the top e-commerce companies and 15 of the world’s 20 largest fintech companies.
