Citi and Coinbase struck a new partnership on October 27 to leverage digital assets to unearth new payment capabilities for the US bank’s institutional clients.
The first phase will focus on pay-in and pay-outs using Coinbase’s on-and-off ramps for fiat-to-crypto, and crypto-to-fiat, payments. The initial phase will also support payment orchestration using a range of cryptocurrencies and stablecoins.
Future strategic initiatives will explore creating fiat to on-chain stablecoin payout methods, as well as collaboration between Citi and Coinbase on making fiat-to-crypto transitions much smoother and enhancing the user experience.
Both companies will look to create a payment orchestration platform for digital assets, supporting 94 markets and over 300 payment clearing systems.
“Citi’s global network and expertise in payments make them an ideal partner as we work to advance digital asset capabilities,” said Brian Foster, Global Head of Crypto as a Service at Coinbase.
“By combining their reach with Coinbase’s leadership in digital assets, we’re creating solutions that can simplify and expand access to digital asset payments. This collaboration reflects our commitment to building the infrastructure needed for the next generation of financial services.”
Citi’s digital asset journey
The collaboration with Coinbase builds on Citi’s attempts to create payment solutions for its clients in an evolving digital payment landscape. This includes the issuance of Citi Token Services and 24/7 USD clearing, which offer real-time services for its institutional clients.
Citi Token Services is a blockchain-based service which enables tokenised deposits for its institutional clients to perform cross-border transactions and handle liquidity management.
Many of Citi’s blockchain-based services have supplemented the e-commerce market. The US bank revealed it “banks 90% of the top e-commerce companies and 15 of the world’s 20 largest fintechs”.
“The financial landscape is changing fast, and we’re thrilled to join Coinbase to explore new and innovative payment options for our global clients,” said Debopama Sen, Head of Payments, Services, Citi.
“With more than 300 payment clearing networks across 94 markets globally, we see collaborating with Coinbase as a natural extension of our ‘network of networks’ approach, further supporting our clients to make payments as if there were no borders.”
Crypto on-and-off ramps
Citi moving into on-and-off crypto ramps is a move which could make the bank stand out from its competitors.
Bank of America and TD Bank do not offer crypto on-and-off ramp services, and while JP Morgan have slowly embraced crypto by providing custody services and have an interest in stablecoins, offering crypto on-and-off ramps provides banking customers and clients the opportunity to connect to the crypto world seamlessly.
By enabling a path for fiat currencies to be converted into crypto almost instantaneously, Citi is providing a path for greater crypto adoption amongst its institutional clients while offering an alternative to both convert fiat and crypto.
