Citi and Coinbase Team Up on Stablecoin Payments

Citigroup has partnered with Coinbase to allow its corporate clients to accept stablecoin payments at checkout without ever touching cryptocurrency. This deal marks a significant step forward for the adoption of stablecoins in mainstream finance.

Stablecoins are digital tokens pegged to the US dollar, and Citi's new partnership with Coinbase will enable its clients to settle these transactions as they would any other bank transfer. The merchant never holds onto the token itself, instead, it is exchanged for dollars through Coinbase's infrastructure.

Coinbase is also offering a product that turns incoming cash into stablecoins, which are then stored at Coinbase and earn a reward of 3.75% per year. This move has sparked controversy among banking groups, who fear that interest-paying tokens could drain deposits from banks.

The partnership between Citi and Coinbase comes just two weeks after a major crypto bill collapsed in Washington over stablecoin regulations. Despite this setback, Citi maintains that the deal changes nothing and is proceeding as planned within its existing banking license and regulations.