Citi & Coinbase expand tie-up for stablecoin payments

Citi and Coinbase have expanded their collaboration to connect digital asset payments with traditional banking services, focusing on payment tools for businesses and consumers in the United States.

Under the agreement, Coinbase will use Citi Services' Virtual Account Wallet to support Coinbase Virtual Accounts. Spring by Citi will also allow institutional clients to accept stablecoin payments at checkout through Coinbase Payments. In both cases, the system is designed to convert automatically between fiat money and stablecoins, with Citi providing the regulated banking infrastructure and acting as settlement bank for merchant transactions.

The move addresses a practical challenge for companies that want to use blockchain-based payment rails without building separate systems to link them to existing treasury and banking operations. The expanded tie-up is intended to reduce operational complexity and risk for clients working across both traditional financial networks and digital asset systems.

Coinbase Virtual Accounts will give Coinbase payments customers bank-account-like functions to accept, hold and pay funds. Incoming fiat payments will be converted automatically into stablecoins, which the companies described as an industry first.

For merchants, the second part of the partnership focuses on checkout. Institutional clients using Spring by Citi will be able to accept stablecoin payments, with Coinbase Payments handling the acceptance layer and Citi converting the digital currency into fiat before settlement.

That model means merchants can reach more than 150 million stablecoin holders globally without directly holding, custodying or managing digital assets themselves. It may appeal to larger companies that want to offer digital payment options while avoiding the balance-sheet, compliance and operational demands of running their own crypto infrastructure.

Payments push

The collaboration is part of Citi's broader digital assets strategy in its services division, where the bank has been developing products that connect cash management, securities and collateral processes with blockchain-based networks. The latest initiatives will launch first in the US.

Citi handles about USD $6 trillion in daily flows and has been building a broader set of always-on payment services, including 24/7 USD clearing and Citi Token Services for cross-border payments. It has also been expanding Spring by Citi and its banking-as-a-service offering as part of a push into digital commerce infrastructure.

The strategy reflects a broader shift in financial services as banks and fintech groups try to bridge conventional account-based systems with tokenised forms of money. Stablecoins, typically pegged to fiat currencies such as the US dollar, have become a major tool for moving value across blockchain networks. But integration with regulated banking systems has remained a barrier for many mainstream corporates.

Shahmir Khaliq, Head of Services, Citi, said the agreement was intended to give clients more choice in how they engage with the digital economy.

"This partnership with Coinbase is a pivotal step in our ongoing Services strategy to provide optionality for our clients. We provide regulated, bank-grade solutions that remove significant hurdles for clients who want to engage in the digital economy, while also providing a foundational service for a leading virtual asset service provider like Coinbase," Khaliq said.

Ashish Bajaj, Head of Services for North America, Citi, outlined the bank's view of where payments infrastructure is heading.

"Our goal is to build the next generation of payments infrastructure that our clients need - one that is seamless, interoperable, and operates across both traditional and digital payments instruments and networks. This is about enabling the future of commerce, today," Bajaj said.

Coinbase role

For Coinbase, the arrangement adds a large global banking partner to the fiat side of its payments and institutional business. The crypto group has been expanding beyond trading into infrastructure for payments, custody and broader on-chain financial activity, and access to regulated banking rails is central to that effort.

Alec Lovett, Head of Infrastructure Product, Coinbase, said Citi would help solve a key operational issue for clients moving between conventional money and stablecoins.

"Clients building on Coinbase have always needed a fast, compliant bridge between fiat and stablecoins, and Citi gives us that at scale. By powering our Virtual Accounts with Citi's regulated banking infrastructure, we're giving businesses bank-account-like functionality with the speed of stablecoins underneath it. And with Coinbase Payments powering stablecoin acceptance through Spring by Citi, our shared customers can move between fiat and digital assets without ever having to think about which one they're touching," Lovett said.

Brett Tejpaul, Head of Coinbase Institutional, framed the deal as part of a wider shift from pilot projects to more routine commercial use.

"Citi is exactly the kind of regulated banking partner the digital asset economy needs to move from experimentation to everyday commerce. This collaboration gives Coinbase customers bank-grade fiat infrastructure on one side and Citi's institutional clients easy, low-friction stablecoin acceptance on the other, without either side needing to build or manage a system they don't need," Tejpaul said.