Citi Taps Coinbase's Stablecoin Infrastructure for Merchant Payments
Citigroup is integrating Coinbase's stablecoin infrastructure into its merchant payment platform Spring. This partnership allows corporate clients to accept digital dollar payments from customers without directly interacting with crypto.
The arrangement between Citigroup and Coinbase has a 3.75% annual interest-like reward for stablecoins held at Coinbase, offering a tidy return for corporate balance sheets holding idle digital dollars. This income comes from Circle's reserve income earned by investing in short-dated U.S. Treasuries and overnight repo agreements through the Circle Reserve Fund.
The GENIUS Act prohibits stablecoin issuers from paying interest directly to token holders, forcing a structural migration of yield from the issuer to distribution platforms like Coinbase. The law will take effect on January 18, 2027, potentially reshaping the economics of stablecoins before its implementation.