Citigroup, a banking giant, is launching a crypto trading and custody service. The new service aims to meet the growing demand for crypto assets.
Itay Tuchman, the global head of forex for Citigroup, has confirmed that the bank had witnessed a rapid accumulation in Bitcoin (BTC) interest from institutional clients. Tuchman announced the move in a report published in Financial Times.
According to Tuchman, banks could venture into crypto through proprietary trading, where they use their resources to make profits. “There are different options from our perspective, and we are considering where we can to best service clients. This is not going to be a prop-trading effort,” said Tuchman.
Not happening any time soon
However, Citigroup has confirmed that it is taking its time to launch crypto services. Tuchman stated that the bank would only jump into the crypto space when it was sure that its clients could benefit. It would also consult with regulators to build something robust and compliant.
“I don’t have any FOMO [fear of missing out] because I believe that crypto is here to stay and that we are just at the very beginning of the market. This isn’t a space race. There is room for more than just one flag.” Tuchman said.
In March this year, the bank released a report saying that Bitcoin could become a global trading currency after evolving. The report indicated that people’s perceptions about Bitcoin were changing. This would create a new opportunity and make the token more mainstream.
Citi’s interest in Bitcoin
Citigroup analysts have written a paper on Bitcoin titled, “Bitcoin: At the Tipping Point’. The report indicated that BTC would change from a nascent form of payment to a store of value. Also, if there’s a boost in Bitcoin’s global reach, the crypto asset could easily become an international currency. This can be achieved through Bitcoin’s attributes such as decentralisation and borderless design.
Citi’s report on the currency shows that BTC may come in handy to exporters and importers. It would simplify international trading and may even be preferred to fiat currencies. Bitcoin lacks forex risk exposure. It is also fast, traceable, and guarantees the security of online payments.
Citigroup is not the only Wall Street bank to venture into the crypto space. Top banking institutions that have ventured into crypto include Bank of New York, Goldman Sachs, Mellon, and Morgan Stanley. This latest move comes amidst increased retail and institutional demand for crypto assets.