Citigroup has expanded its partnership with Coinbase so the bank”’s corporate clients can accept stablecoin payments at checkout, while Coinbase”’s business customers get bank-account-style accounts powered by Citi. The collaboration, announced September 28, works in both directions: Citi”’s institutional clients receive stablecoins from their customers and get dollars settled as the bank of record, and Coinbase”’s payments users hold accounts that automatically convert incoming fiat into stablecoins.
The two products are Coinbase Virtual Accounts, built on Citi”’s Virtual Account Wallet from its Banking-as-a-Service unit, and stablecoin acceptance through Spring by Citi, the bank”’s merchant payment platform, with Coinbase Payments handling the crypto side. Both launch in the United States first, with more capabilities promised in the coming months.
“Clients building on Coinbase have always needed a fast, compliant bridge between fiat and stablecoins, and Citi gives us that at scale,” said Alec Lovett, head of infrastructure product at Coinbase. Citi”’s services head Shahmir Khaliq called the partnership a pivotal step in the bank”’s services strategy.
How the plumbing works
On the merchant side, a customer pays in stablecoins, Coinbase Payments receives and converts the funds, and Citi credits ordinary dollars to the merchant”’s account. The business never holds, custodies or manages digital assets. Coinbase says the setup opens merchants to more than 150 million stablecoin holders worldwide, a figure describing potential reach rather than confirmed users.
On the account side, Coinbase Virtual Accounts give payments customers the ability to accept, hold and pay funds through a bank-account-like vehicle. Incoming dollars are automatically converted into dollar-pegged stablecoins held at Coinbase, which currently pay an interest-like reward of about 3.75 percent a year, according to The Wall Street Journal. Neither company has said which stablecoin the accounts convert into, and the announcements do not name specific tokens.
The structure splits the work along each firm”’s strengths. Citi keeps the licenses, the client relationships and the settlement. Coinbase keeps the blockchain rails and the conversion. Neither side has to build the stack it does not want.
Why banks are moving now
The deal extends a collaboration first announced in October 2025, when the two firms said they would work on digital-asset payment capabilities for Citi institutional clients. What has changed since then is the regulatory and competitive context. The GENIUS Act created a federal framework for payment stablecoins, and regulators are implementing it through proposed rules at the Federal Reserve and the Office of the Comptroller of the Currency. Banks that spent years testing blockchain ledgers are now wiring stablecoins into production payment products.
Citi disclosed a separate expansion the same day: Citi Token Services, its tokenized-deposit platform, went live in Japan and the United Arab Emirates, bringing the service to seven markets. Tokenized deposits are claims on the bank itself recorded on a permissioned blockchain, a different instrument from third-party stablecoins like USDC. Citi is also among roughly two dozen institutions planning a joint dollar stablecoin that could launch as early as 2027.
The 3.75 percent reward on stablecoin balances touches a political nerve. Interest-like yields on stablecoins were one of the disputes that stalled the CLARITY Act in the Senate, with banks arguing that paying yield on payment tokens drains deposits from the banking system. Coinbase is already paying it, and the Citi partnership builds that yield into a bank-adjacent product.
The economics on each side explain the timing. For Coinbase, stablecoin revenue is already material: the company reported about 92 million in stablecoin revenue in the second quarter, with average USDC held across its products at a record 0 billion, more than 30 percent of circulating supply. Subscription and services revenue made up 48 percent of net revenue that quarter, and every distribution deal pushes more balances onto its platform. The 3.75 percent reward it pays holders is cheaper than the interest it earns on reserves behind the tokens.
For Citi, the calculation is defensive and offensive at once. Payment volumes in stablecoins are growing from a small base, and a bank that refuses the rail risks losing corporate clients to competitors that accept it. By sitting in the middle as bank of record, Citi keeps the deposit relationship and the settlement fees while outsourcing the blockchain plumbing. The bank”’s own tokenized-deposit work covers internal liquidity movement; the Coinbase deal covers customer-facing payments it cannot serve with tokenized deposits alone.
Cross-border payments are the sharpest use case. Traditional correspondent banking chains can take days and stack fees at each hop. A stablecoin leg settles in seconds, and the conversion back to fiat happens at the destination bank. Citi”’s Token Services expansion into Japan and the UAE targets the same pain point with tokenized deposits, giving corporate clients two parallel options depending on whether the counterparty wants bank money or public-chain tokens.
Competitive context
Coinbase has been signing distribution deals through 2026: payments firm PPRO in May, Stablecore for more than 3,000 US banks and credit unions in September, and Moov for over 1,000 community banks. JPMorgan”’s JPM Coin deposit token already runs on Base, Coinbase”’s layer-2 network. Each link routes payment volume through Coinbase infrastructure regardless of crypto prices, which matters as the company pushes to grow revenue that does not depend on trading.
Citi, which moves about trillion in payments daily and banks 90 percent of the top ecommerce companies, is positioning itself as the regulated bridge between the two worlds. Stablecoin supply stood near 05 billion in late September, small next to Citi”’s own 2030 projections but growing fast enough that the bank wants a role in the conversion layer.
For corporate treasurers, the practical pitch is simple: accept a payment rail some of your customers already use, without building crypto operations. Whether volumes follow depends on pricing and on how many counterparties actually want to pay in tokens.