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American multinational investment bank Citigroup announced plans to potentially issue its stablecoin, as CEO Jane Fraser revealed during a post-earnings conference call.
As first reported by Reuters, Fraser emphasized the bank’s focus on both the stablecoin initiative and the growing tokenized deposit sector, stating, “This is a good opportunity for us.”
As the third-largest lender in the United States, Citigroup is also exploring solutions for reserve management related to stablecoins and providing custody services for cryptocurrency assets.
Citigroup’s Plan For New Stablecoin Initiative
This announcement follows a strong second-quarter performance for Citigroup, which saw its shares reach their highest levels since the 2008 financial crisis.
The bank reported earnings that exceeded Wall Street expectations and unveiled plans to buy back at least $4 billion in stock, further bolstering investor confidence.
The timing of Citigroup’s stablecoin discussions coincides with the Republican Party’s “Crypto Week,” a campaign aimed at advancing crucial legislation to establish a regulatory framework for digital assets.
Among the key proposals is the GENIUS Act, designed to facilitate the adoption of stablecoins within the traditional financial ecosystem. However, the path to regulatory approval has faced challenges.
Legislative Setback For Crypto
President Donald Trump called for swift passage of the GENIUS Act and the CLARITY Act, promoting them as pivotal for the United States to maintain its leadership in digital assets. In a Tuesday post on Truth Social, Trump proclaimed:
The House will soon VOTE on a tremendous Bill to Make America the UNDISPUTED, NUMBER ONE LEADER in Digital Assets – Nobody does it better! The GENIUS Act is going to put our Great Nation lightyears ahead of China, Europe, and all others, who are trying endlessly to catch up, but they just can’t do it. Digital Assets are the FUTURE, and we are leading by a lot! Get the first Vote done this afternoon (ALL REPUBLICANS SHOULD VOTE YES!).
Despite this push, the House of Representatives voted against the bill, with the final tally standing at 196-223. Notably, 13 Republican representatives joined Democrats in opposing the motion, marking a rare instance of dissent within the party.
Fox journalist Eleanor Terret reported that some House members expressed concerns that the GENIUS Act could inadvertently pave the way for a Central Bank Digital Currency (CBDC).
However, the bill includes provisions explicitly prohibiting the Federal Reserve from directly offering services to the public, ensuring that it cannot authorize initiatives like digital wallets or personal accounts related to CBDCs.
The ultimate fate of these crucial crypto bills in the US Congress remains to be seen, as does whether this recent decision will cause financial giants to pause their plans to issue or adopt a major stablecoin for their clients.
Featured image from DALL-E, chart from TradingView.com
