American institution Citibank is building a crypto trading and custody service |
As Cryptocurrency markets continue to grow, more and more companies are looking to get in on the action. An American icon, Citibank has announced that they are building a crypto trading and custody service that will see them start to offer their services in the crypto industry.
The new institutional digital asset platform is intended to serve hedge funds, family offices, market intermediaries and other buy-side institutions, which until now have struggled to gain reliable access to cryptocurrency trading services. Citi, which is the world’s first major bank to launch a dedicated cryptocurrency service, is initially targeting its service to institutional clients in the U.S., but it is looking to expand it to other areas of the world.
US multinational investment bank Citigroup is reportedly developing cryptocurrency-related services such as trading, storage and financing due to the rapidly growing interest from customers.
According to a report in today’s Financial Times, the bank has not yet decided when – if ever – it will offer crypto services to its customers, but is nevertheless preparing for the event.
Customer interest in cryptocurrencies is increasing
From our perspective, there are many options and we look at where we can best serve our clients. This is not an attempt to encourage trading, Itai Tuchman, head of global currencies at Citi, told the publication.
This means that regardless of the final decision, the bank does not intend to engage in proprietary trading – where financial institutions trade assets for their own account. However, as Mr Tuchman pointed out, trading and custody services are already being developed.
He explained that since August 2020, the bank has seen a very rapid increase in interest in cryptocurrencies among its clients, including large investment firms. They have reportedly asked Citi to offer them all sorts of cryptocurrency-related services, from research to trading specific coins.
At the same time, the bank has taken a very cautious and measured approach to the emerging market to avoid unnecessary risks and regulatory hurdles, Tuchman said.
We must not do anything that is not safe and secure. We won’t get started until we’re confident we can create something that will benefit customers and that regulators can support, he explained.
So Citi is in no hurry to jump on the cryptocurrency bandwagon as soon as possible, Tuchman noted, but is preparing to enter the market at the right time.
I have no FOMO because I believe cryptocurrencies are here to stay and we are only at the very beginning of the market. This is not a space race. There is room for more than one flag, he concluded.
As mentioned earlier, Citi is the latest traditional financial institution to show interest in cryptocurrencies. For example, BNY Mellon, America’s oldest bank, announced in February that it would store, transfer and issue cryptocurrencies for its customers. More recently, Goldman Sachs has formed a trading team in cryptocurrencies.
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