Citibank is considering launching a cryptocurrency custody service.
This is what Citi’s global head of foreign exchange, Itay Tuchman, told the Financial Times.
Tuchman said that the bank is seeing a very rapid growth in interest in bitcoin from large clients, from as early as August last year, and that the bank is considering how to “best service clients”.
However, he also specified that they are not in a hurry to launch cryptocurrency-based services, and that the bank will only step in when it is sure it can make something truly useful for its customers and fully regulated.
Tuchman in fact stated:
“I don’t have any FOMO because I believe that crypto is here to stay and that we are just at the very beginning of the market”.
Citi has been closely watching the crypto market, and bitcoin in particular, for some time now, most likely due to the growing interest from its clients. The goal seems to be to do business with cryptocurrency-related services, rather than direct investments or speculation on the coins.
Citibank is one of the oldest financial institutions in the US, having been founded as early as 1812 in New York. It is now the consumer financial services division of the multinational Citigroup, with 2,649 branches in 19 countries.
Why Citibank might offer crypto custody services
The fact is that the bank’s wealthiest clients are unlikely to agree to operate directly on crypto markets. This would entail two major problems: taking full responsibility for the direct custody of large sums of cryptocurrency, and not always operating fully within the regulatory boundaries.
In addition, if they were to operate directly, commissions on exchanges would be collected by the exchanges, not the bank.
So while the bank may be interested in providing cryptocurrency-related services to collect the fees that would otherwise go to the exchanges, wealthier customers may appreciate an external custody service, perhaps provided by the same bank that already holds their fiat currency assets.
As this type of customer’s interest in cryptocurrencies grows, it is hard to imagine the bank continuing to ignore it. In fact, even such an old institution, for the US, is inevitably beginning to take an interest in this market, and it will probably not be long before it starts offering crypto services, as other similar institutions are already doing.