Citi plans to launch crypto services after surge in customer interest
Citigroup, one of the world’s largest currency trading banks, plans to take its first steps into the cryptocurrency markets after renewed interest from clients.
The group is the latest banking giant to consider entering new markets according to Itay Tuchman, its global head of foreign exchange. Despite reputation challenges, large dealers have been forced to respond to the growing interest in bitcoin from asset managers and hedge funds.
Tuchman said the bank has yet to decide whether it will offer cryptocurrency-related services to its customers, but he said trading, custody and funding are all under consideration.
âFrom our perspective, there are different options and we are looking at where we can best serve customers. It’s not going to be a prop-trading effort, âTuchman told the Financial Times, referring to proprietary trading in which banks trade for their own account.
In March, Citi released a 108-page report noting that despite “a host of risks and obstacles that stand in the way of Bitcoin’s progress,” the cryptocurrency “could be optimally positioned to become the preferred currency of commerce. worldwide â.
The price of bitcoin, the largest cryptocurrency by volume, has fallen 12% from a record high last month, but is still up 75% since the start of the year, trading at $ 57,000 Thursday.
Goldman Sachs, Bank of New York Mellon and State Street are among the large institutions that recently announced their intention to become active in different areas of the cryptocurrency market.
Tuchman said that since August of last year, Citi has seen a “very rapid” build-up of interest in bitcoin among a wide range of clients, including large asset managers. Some had asked the bank for research, and others wanted to trade a range of coins through the bank and fund deals with cryptocurrency holdings.
âWe shouldn’t be doing anything that isn’t safe. We step in when we are confident that we can build something that benefits customers and that regulators can support, âhe said.
Insiders of major crypto trading companies privately doubt that conventional banks will be able to compete with bitcoin specialists who have been in the business for years.
Galaxy Digital, a New York-based company led by Michael Novogratz, on Wednesday unveiled a $ 1.2 billion deal to buy BitGo in a move it says aims to create a “full-service platform for institutions seeking to access the crypto-economy â. BitGo, which has $ 40 billion in assets in custody, already offers services like custody, portfolio management, and blue chip lending.
Tuchman said Citi is in no rush to make a decision on how deep it should enter the crypto market.
“I don’t have a FOMO [fear of missing out] because I believe crypto is here to stay and we are only at the very beginning of the market, âhe said. âThis is not a space race. There is room for more than one flag. “