Citi and Coinbase have agreed to jointly develop a payment infrastructure that will allow the bank's corporate clients to accept payments in stablecoins. This involves institutional clients and large companies using Citi's payment services. Coinbase is responsible for the technological part: the infrastructure for stablecoin transactions and the blockchain component. The received digital assets are automatically converted into traditional currency, after which Citi conducts final settlements through the banking system.
A reverse scenario is also provided: clients of Coinbase's payment services will be able to use Citi's infrastructure to receive, store, and disburse funds. The incoming fiat currency is automatically converted into stablecoins pegged to the US dollar. The stablecoins will be stored in Coinbase and yield income at the current annual rate of 3.75%.
Shahmir Khalik, head of Citi's services division, noted that the partnership aims to connect digital assets with sectors of the economy that use fiat currencies. According to him, this is an important part of completing the overall picture.
At the same time, Citi is developing its own blockchain services for cross-border transfers between corporate accounts around the clock. The system is already operational in seven jurisdictions, including the US, Japan, and the United Arab Emirates.
Brett Tejpaul, head of Coinbase Institutional, noted that the collaboration will allow consumers and businesses to switch between dollars and stablecoins without leaving the traditional banking system. In his opinion, the partnership will also help leverage the capabilities of stablecoins for cross-border payments, which can be faster, cheaper, and of higher quality.
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