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The observation came amid the US bank’s effort to offer technology-enhanced services and its statement that it was looking at the issuance of a “Citi stablecoin”. Stablecoins are digital tokens backed by fiat currencies or other reserve assets.
CEO Jane Fraser said during an earnings call on July 15 that the bank aimed to deliver the benefits of advancements in stablecoins and digital assets to its clients, which would help it modernise internal operations, unlock new revenue streams and acquire new clients. The comments came soon before the passage of US legislation on stablecoins, which could pave the way for more mainstream adoption of cryptocurrencies and digital assets.
“We welcome regulators providing us guidance and insight on the stablecoin landscape, allowing us to continue developing new services that help our clients run their businesses every day,” he said in an interview on July 14 in Hong Kong.
However, while companies were curious about the blockchain technology behind stablecoins, a need existed for “clear accounting rules regarding stablecoins and their impact on balance sheets and liquidity”, said Khaliq, who is also a member of Citigroup’s executive management team.
“There needs to be more regulatory clarity,” he added. “It’s very early days in the process.”
