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▲ USDC, USDT, Stablecoin, Cryptocurrency Payment/AI Generated Image
Global major investment bank Citi has partnered with virtual asset exchange Coinbase to fully introduce a stablecoin payment system for corporate clients. By establishing a structure that allows payment settlements in US dollar cash without directly holding virtual assets, the adoption of stablecoins in Wall Street's traditional financial network is accelerating.
According to virtual asset specialized media BeInCrypto on September 28 (local time), large corporations using Citibank will be able to support stablecoin payments in their customer payment windows in the future. When a customer pays with stablecoins, Coinbase immediately converts them to dollars, and Citibank settles the payment to the selling company in the same way as a regular bank transfer. This eliminates the need for companies to directly custody or handle virtual assets.
A reverse service will also be established. Coinbase payment customers can link account-based products through Citibank and convert incoming US dollar cash into stablecoins. These stablecoins held on Coinbase will receive an annual reward of approximately 3.75%.
This partnership was announced immediately after the US cryptocurrency market structure bill was stalled, attracting significant attention from the financial industry. The bill failed to meet the 60-vote requirement, with 49 votes in favor and 50 against, in a procedural vote in the US Senate on September 15. A key reason for the bill's failure was cited as banking lobby groups demanding a ban on interest and reward payments for stablecoins.
The banking sector warned that interest-bearing virtual assets could significantly absorb bank deposits, weakening the lending capacity of local communities. The letter sent to the Senate at the time was signed by eight major banking lobby groups, including the Financial Services Forum (FSF) led by Citi CEO Jane Fraser. While the lobby group to which Citibank's head belongs pressured for a ban on stablecoin earnings, Citibank's headquarters, in a seemingly contradictory move, is providing backend financing for Coinbase's payment structure that offers an annual return of 3.75%.
Despite the Senate's rejection of the bill, Citibank maintains that its business initiatives will not be hindered. Shahmir Khaliq, Global Head of Citi Services, stated in an interview with the Wall Street Journal (WSJ), "We are not constrained by the bill's failure," adding, "We will continue to fulfill our role within our existing banking licenses and current regulatory framework."
Citibank is actively building on-chain financial infrastructure, including expanding its private blockchain network for corporate fund settlements to Japan and the United Arab Emirates (UAE). Amid the conflicting forces of traditional finance's regulatory lobbying and actual business integration, the competition among Wall Street's giant banks to secure a leading position in stablecoin payment networks is expected to intensify.
[Key Article Summary]
-Citi and Coinbase have partnered to build a system where businesses can settle stablecoin payments in dollars without holding the coins directly.
-Coinbase customers can use a stablecoin conversion service through their Citi accounts, receiving an annual return of 3.75%.
-Citi achieved the exact opposite collaboration immediately after market legislation stalled due to banking sector lobbying to ban stablecoin interest.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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