Citi Chief Executive Jane Fraser said stablecoins can be "clunky" for the bank's corporate clients, even as the institution builds multiple ways for businesses to move digital money.

Speaking on Citi's October 13 earnings call, Fraser said stablecoins can be harder for the bank's corporate client base to use across borders because of compliance, accounting and tax requirements.

"We see less activity on stablecoins, honestly, given the nature of our client base. Stablecoins can be a bit more clunky, with more complexity around compliance, accounting and tax when moving money around the world, whereas tokenization provides the easiest way to do it."

The remarks, recorded on page 16 of Citi's third-quarter earnings transcript, describe demand among Citi's own clients rather than the entire stablecoin market. Citi is also building services that let businesses reach stablecoin users without requiring every merchant or treasury team to hold the tokens themselves. That distinction underpins the whole strategy: stablecoins are blockchain tokens pegged to a currency and transferable on public networks, while tokenized deposits are digital records of commercial-bank money that stay within a bank's own account and clearing structure.

Why Citi Favors Tokenized Deposits for Treasury Transfers

Citi Token Services is designed for clients moving liquidity between participating Citi branches on a 24/7 basis. According to the service's FAQ, clients do not need a wallet, blockchain node or tokens: they initiate payments through existing Citi accounts while the bank manages the blockchain infrastructure.

That setup addresses a familiar treasury task. A company moving dollars between operating entities needs the receiving entity to have usable funds, with approved payment instructions and records that fit into existing accounting and reconciliation processes. Faster movement is valuable only if the surrounding banking workflow still works. The 24/7 design speaks to a known constraint: conventional bank payment rails follow business-day schedules, so transfers initiated over weekends or holidays typically wait for the next opening.

Fraser said Citi Token Services and deposit tokenization were operating in seven markets and connected with Citi's 24/7 clearing capabilities. She also referred to connections with 300 peer banks, but that figure relates to Citi's clearing network; it does not mean 300 banks are using Citi Token Services itself.

Stablecoin Acceptance Serves a Different Purpose

Citi's work with Coinbase addresses merchants receiving payments from customers who choose to use stablecoins. The stablecoin feature added to Spring, Citi's institutional payments platform, lets merchants access that demand through an existing payments platform.

Under the arrangement described in Coinbase's September 28 announcement, Coinbase converts the digital currency into fiat and Citi settles the funds as bank of record. The service is launching first in the United States.

The customer can pay in stablecoins while the merchant receives conventional currency. That removes the need for a business to custody tokens or decide whether to retain them on its balance sheet after each sale.

It does not suit every use case. A business that needs to retain and spend stablecoins on public networks would need a different arrangement, because automatic conversion into fiat removes the token from the payment flow.

Cross-B Tokenized Money Still Needs a Settlement Route

Transfers within Citi's own network do not solve the broader problem of sending money to a supplier, subsidiary or counterparty using another bank. That is the purpose of Citi's work with other institutions on Swift's Digital Ledger.

The DBS–Citi weekend dollar-payment test showed one possible route. DBS said its September 5 payment with Citi's New York office used tokenized deposits through Swift's Digital Ledger and took minutes.

The model separates two steps that can sound identical in a headline. Swift's ledger provides instant payment commitment using tokenized deposits, while final settlement can still rely on established mechanisms, including real-time gross settlement. Citi describes the initiative as a controlled proof-of-concept phase running from July through December 2026, rather than a broadly available cross-bank product.

Citi Is Not Choosing One Form of Digital Money for Every Task

Fraser's comments make most sense in this product context. Tokenized deposits allow Citi clients to move bank money within a familiar account structure. Stablecoin acceptance gives merchants a way to serve customers who prefer digital-currency payments without exposing the merchant to the token itself.

The cross-bank model is less mature: its value depends on more participating institutions, currencies and settlement arrangements. The published timelines offer concrete checkpoints, with the Swift proof-of-concept running through December 2026 and the Spring stablecoin feature beginning in the United States. Citi's strategy is therefore not a simple rejection of stablecoins. It is an attempt to match each form of digital money to a specific payment task—and to keep corporate clients connected to the bank's own payment infrastructure throughout the process.

This article is provided for informational purposes only and does not constitute financial, legal or tax advice. Product availability and payment terms vary by jurisdiction and client eligibility.

Source: Coindoo