Citibank's Virtual Money Custody Service will launch in 2026! Partnering with Europe's stablecoin project.

Citigroup, after three years of preparation, plans to officially launch its Citigroup Virtual Money Custody Service in 2026, directly holding native virtual money. The bank predicts that Bitcoin and Ethereum will maintain a positive pump by the end of 2026.

Citigroup's three-year plan: officially entering crypto custody in 2026

According to a report by CNBC on October 13, Citigroup plans to launch a Citigroup virtual money custody service in 2026 to strengthen its strategic position in the digital asset market. The launch of this service will make Citigroup one of the first traditional banking giants to offer native virtual money direct custody.

Biswarup Chatterjee, the Global Head of Collaboration and Innovation at Citibank, stated to CNBC that Citibank has been developing this service for the past two to three years and is making steady progress. The preparations during this time demonstrate Citibank's cautious yet firm attitude towards the Virtual Money market, ensuring that the technological architecture and compliance framework meet the high standards of the banking industry.

· Hybrid Technology Strategy: Internal Development and Third-party Collaboration in Parallel

Chatterjee detailed the technical roadmap of Citigroup's virtual money custody services: "We may have certain solutions that are completely designed and built in-house, which are targeted at specific assets and certain customer groups, while for other types of assets, we may use third-party, lightweight, flexible solutions."

Dual-track system of technical strategy:

### 1. Internal Development Solutions

For specific asset classes and high-net-worth clients, Citibank is building a fully autonomous custody platform to ensure complete control over critical business processes.

2. Third-party partnerships

Citigroup is exploring partnerships with professional crypto custodians to address broader asset classes and customer needs, adopting lightweight and flexible integration solutions to accelerate service rollout.

This hybrid strategy balances security, flexibility, and market coverage, enabling Citigroup to offer differentiated services to clients with varying risk appetites. Citigroup's virtual money custody service will allow the bank to directly hold native virtual money instead of relying on third-party intermediaries, marking a significant breakthrough for traditional banking in the digital asset space.

Regulatory Barriers Lifted: Federal Reserve Policy Shifts to Green Light

The timing of Citigroup's launch of its Virtual Money custody service is not coincidental, but closely related to significant changes in the regulatory environment in the United States.

· The Federal Reserve Withdraws Regulatory Guidance

Citigroup, after three years of preparation, plans to officially launch its virtual money custody service in 2026, directly holding native virtual money. The bank forecasts that Bitcoin and Ethereum will maintain a positive pump by the end of 2026.

The Federal Reserve (Fed) has decided to withdraw the guidance requiring banks to notify regulators before engaging in digital asset activities, a move that effectively reduces the compliance costs and time barriers for banks entering the virtual money sector.

Moreover, similar initiatives by the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) have further eliminated previous barriers for banks to offer crypto-related services. This systemic shift in the regulatory environment has created unprecedented favorable conditions for traditional financial institutions to explore digital asset business.

The Collective Shift of Traditional Banking

The actions of the Federal Reserve not only affect Citigroup but also trigger an increasing number of traditional financial institutions to begin exploring virtual money custody. This collective shift reflects:

Institutional demand is real: Clients' demand for crypto asset custody continues to grow.

Increased competitive pressure: Banks that do not enter the market may lose high-value customers.

Regulatory certainty has improved: Clarification of policies has reduced compliance risks.

Increased technology maturity: Custody technology and security standards are increasingly improving.

The launch of Citigroup's virtual money custody service is a strategic choice in this favorable environment.

Citi is optimistic about 2026: Bitcoin and Ethereum have a positive outlook

As the end of the year approaches, Citigroup expresses an optimistic attitude towards the prospects of the virtual money market, especially regarding Bitcoin (BTC) and Ethereum (ETH), the two leading crypto assets by market capitalization.

· Citigroup Strategist's Price Outlook

Scott Chronert, a strategist for Citigroup's U.S. stocks, stated in an interview with CNBC last Wednesday that the company expects the pump of Bitcoin and Ethereum to continue until 2026. He emphasized that these two major virtual currencies provide investors with an opportunity to hedge against stock risks.

Investment Logic:

1. Value of Hedging Tools

In the context of increasing uncertainty in the global economy, Bitcoin and Ethereum, as non-correlated assets, can provide risk diversification benefits for traditional stock portfolios.

2. Institutions Adopt Acceleration

With more banks launching custody services, the barriers for institutional investors to enter the crypto market are lowered, which will bring about a new round of capital inflow.

### 3. Enhanced Regulatory Clarity

The friendly transformation of the regulatory environment in the United States has reduced the policy risk premium, which is conducive to stable price increases.

Citigroup's optimistic forecast aligns closely with its timeline for launching custody services, indicating that the bank believes 2026 will be a key growth period for the virtual money market.

Stablecoin Dual Layout: Investment and Consortium Participation

Citigroup's ambitions in the virtual money sector are not limited to custody services; it is also actively positioning itself in the stablecoin market, adopting a dual strategy of investment and collaboration.

· Strategic Investment: Citibank's Investment in BVNK

The stablecoin company BVNK previously disclosed that Citigroup's venture capital division, Citi Ventures, has made a strategic investment in the company. This investment indicates Citigroup's long-term optimism about stablecoin infrastructure and its desire to gain technological insights and market advantages through strategic collaboration.

· Join the European Stablecoin Alliance

Bloomberg reported on October 10 that Citigroup plans to join a consortium of nine European banks to develop a regulated euro stablecoin, expanding its presence in the digital asset space.

Members of the consortium include:

· ING Group

· UniCredit Bank

· DekaBank

· Other major European banks

The consortium plans to launch the token in the second half of 2026, highly coordinated with the launch time of Citibank's Virtual Money custody service.

strategic value of stablecoins

Chatterjee stated that stablecoins could play a role in areas with limited banking infrastructure. He added that as Citigroup's customers grow in these markets, stablecoin solutions can help facilitate cross-border payments.

Stablecoin Use Cases:

Cross-border remittance: Reduce international transfer costs and time

Emerging Market Payments: Bridging the Gap in Traditional Banking Services

Corporate Fund Management: Enhancing Financial Efficiency for Multinational Enterprises

Trade Financing: Simplifying International Trade Settlement Processes

Citigroup is participating in both stablecoin investments and consortium development, indicating that the bank believes stablecoins will become a core component of future digital financial infrastructure.

Traditional Banks Embrace Crypto: Citibank's Demonstration Effect

Citigroup has launched a virtual money custody service and participated in the development of stablecoins, marking a fundamental shift in the traditional banking sector's attitude towards virtual money. This is no longer a marginal experiment but an important component of core business strategy.

Industry Impact:

As a globally systemically important bank, Citigroup's entry into the crypto custody market will create a demonstration effect, accelerating the pace at which other traditional financial institutions follow suit. This collective shift will bring to the virtual money market:

Liquidity Improvement: Institutional Funds Flowing In on a Large Scale

Price Stability: Increase in the Proportion of Long-term Investors

Increased compliance standards: bank-level risk control requirements

Mainstream adoption acceleration: lowering the psychological barrier for ordinary investors