It is really starting to kick in.
The next 18 months will see a massive shift in banking and the world of payments. As expected, the passage of the GENIUS Act has fueled speculation the banks are going to enter into this market in a major way.
We are starting to see evidence that is precisely the case.
Citigroup is one of the largest banks in the United States. While it might not get the attention that is given to a JPMorgan, this is one of the institutions to watch. The interest in crypto has been ongoing, with the bank researching where to enter.
It appears some decisions are leading to action. Citi is determined to be a major player in the crypto market. Stablecoins is one area where it is intent on establishing a foothold.
Citi Partners With Coinbase For Stablecoin Payments
There is still some issue moving between crypto and fiat currency. The banks are going to resolve this by linking accounts direct. This means a crypto account will have direct access to the bank.
For Citi, this is being done through a partnership with Coinbase. The latter is already the leading crypto exchange in the United States.
Citigroup is eyeing stablecoin payments as its next major growth driver, partnering with crypto exchange Coinbase to expand its digital asset capabilities. The initiative initially focuses on making it easier for clients to move between crypto and fiat currencies.
This is a crucial move. Consider the impact that could have simply based upon the size of the bank.
Citi has $1.384 trillion in deposits. That is an enormous sum of capital that can be used for stablecoin payments. The Federal Reserve, according to Grok, has placed the USD volume of payments by the largest US banks at $1.2 quadrillion. This includes primarily JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo.
The bank's own analysts see a bright future for stablecoins.
The announcement comes roughly a month after Citi projected that the stablecoin market could surge to $4 trillion by 2030, up from about $315 billion today.
Here we have one of the more aggressive forecasts regarding the market cap of stablecoins. That is about a 13x from the present levels.
It is easy to see how this could occur with banks such as Citi getting involved. What do the payment totals for this bank alone look like? At the same time, how many tokens will be needed to handle deposits totaling $1.2 trillion? If there is a 1 in 10 distribution, we are looking at 120 million stablecoins just from Citi.
Monetary Transformation
We are watching the largest transformation in monetary history. In under 5 years, the basis of currency changes completely. Bank deposits will all be tokenized. Of course, according to the law, this might account for only 20% of the backing.
The other 80% will come from Treasuries and other highly liquid assets.
Most people think there is a magical money printer, a result of listening to economists. The banking system actually works much differently. If we look at the US dollar, it comes in many forms.
When dealing with Citi, we are looking at commercial bank money. That is, however, being combined with Eurodollar money. Here we enter a completely different realm.
The US dollar can exist in many forms. It is no different than water also appearing as ice or steam. It is still water, just existing in a different state.
Dollars are doing the same thing. This is where the confusion enters. We also can see how the world of collateralization is changing. Actually, a stablecoin is really a tokenized treasury (or 80% of it is). This opens up a host of new possibilities.
Banks are not going to miss out on this opportunity. The biggest component of the delay is infrastructure. That is what entities are building.
Many forecasts having 2026 as the year things are rolled out with the kick-off really taking place in 2027.
Citi is going to be one of the banks involved.