Financial giant Citi’s institutional clients will be able to accept stablecoins thanks to Coinbase integration; digital assets will be automatically converted to fiat currency.
Citi, one of the largest financial institutions in the US, has expanded its existing collaboration with Coinbase to enable its corporate clients to accept stablecoin payments. The new system will connect Citi’s Spring by Citi payment infrastructure with Coinbase Payments.
Thanks to the integration, businesses using Spring by Citi will be able to accept stablecoins from their customers during the payment process. The received digital tokens will be automatically converted into fiat currencies such as dollars. Citi will handle the final settlement of the funds and act as the registered bank in the transaction.
This structure will eliminate the need for businesses to create cryptocurrency wallets, manage private keys, or hold stablecoins on their balance sheets. From the company’s perspective, the transaction will be settled in traditional currency, while the payer will be able to use stablecoins. Thus, the speed of blockchain-based payments will be combined with the accounting and consensus infrastructure of the classic banking system in a single transaction.
Coinbase plans to offer virtual accounts through its infrastructure model as a banking service. Users will be able to automatically convert their fiat currency into stablecoins in these accounts. The collaboration will initially launch in the US.
Companies say the service is particularly geared towards corporate clients operating in different countries who want to receive payments around the clock. While stablecoin transfers can be made outside of bank operating hours, regulatory checks, customer verification, and final banking settlement of the funds will remain part of the system.
The partnership doesn’t directly mean a new stablecoin will be launched. Citi and Coinbase are connecting payment channels that use existing stablecoins. The tokens to be used, fees, transaction limits, and all supported countries have not yet been announced.
*This is not investment advice.
