Citi and Coinbase Launch Stablecoin-to-Dollar Conversion for US Institutions

Citigroup and Coinbase have launched a US service that automatically swaps stablecoins like USDC into dollars and back again, aimed at institutional clients rather than retail users. The arrangement, reported by Forexcrunch, means a Citi business customer receiving a stablecoin payment never takes custody of the token: Coinbase handles the conversion behind the scenes and Citi books the resulting deposit as an ordinary payment.

The flow runs in both directions. Businesses building on Coinbase can open accounts with bank-account-like features, powered by Citi’s banking software, where incoming dollars are converted into stablecoins automatically. Coinbase described the potential audience as more than 150 million stablecoin holders worldwide, though that figure is the company’s own and has not been independently verified.

Also read: CFTC Registers Coinbase Clearing LLC, Completing Derivatives Stack

Key facts

• Citi’s merchant platform, Spring by Citi, now uses Coinbase infrastructure so Citi’s enterprise clients can accept stablecoin payments at checkout, with Coinbase converting tokens to fiat and Citi settling the funds.
• Coinbase Virtual Accounts, built on Citi’s banking-as-a-service platform, give Coinbase payments customers bank-account-like features and automatically convert incoming fiat into stablecoins.
• Both features launch first in the United States, with more capabilities planned in the coming months, according to Decrypt.
• The deal expands a partnership the two firms first announced in October 2025, when they said they would work on fiat pay-ins and payouts for Citi’s institutional clients.
• The same week, Bitcoinmagazine reported that Goldman Sachs opened its $100 billion Treasury fund to crypto firms through the Lynq settlement network without tokenising the fund, though the report did not name the date.

Coinbase’s head of infrastructure product, Alec Lovett, framed the tie-up as a compliance bridge, saying fintechs building on Coinbase have needed a fast, compliant link between fiat and stablecoins and that Citi provides it at scale. Debopama Sen, Citi’s head of payments, said the bank’s goal is payments infrastructure that works across both traditional and digital instruments.

Brett Tejpaul, who leads Coinbase Institutional, described Citi as the kind of regulated banking partner the digital asset economy needs to move from experimentation to everyday commerce.

Also read: Bitcoin Falls 4% as Crypto Stocks Slide on Stalled US Regulation Bill

How the two companies describe it

Bitcoinmagazine reported the arrangement as a joint statement issued Monday, describing two halves to the deal. Decrypt reported it as a deepening of a previously announced partnership, describing the Coinbase Virtual Accounts as powered by Citi’s Virtual Account Wallet. Forexcrun… hmm, Forexcrunch noted that neither Citigroup nor Coinbase has published its own standalone announcement, so which stablecoins the service supports and which clients use it are not confirmed.

Citi has pushed further into digital assets beyond this deal. Bitcoinmagazine noted it said last month that institutional investors would be able to custody traditional assets and bitcoin within a single framework rather than separate systems later this year, and Decrypt reported plans announced in August to add bitcoin custody to its Custody+ suite. Citi also runs Citi Token Services for real-time cross-border payments using tokenised deposits, and has worked with Deutsche Bank, Goldman Sachs and Bank of America on exploring a stablecoin product.

Coinbase, meanwhile, has been widening its product line. Decrypt reported it rolled out fixed-rate USDC loans against bitcoin powered by Morpho last week, and launched tokenised stocks on Base, its Ethereum layer-2 network, for non-US users in August.

Why it matters

Two of the largest US banks plugging crypto firms into legacy rails in the same week signals stablecoin volumes have grown large enough that banks would rather process them than lose the business. For institutional clients, the practical effect is that stablecoin inflows and outflows increasingly land as ordinary dollar deposits, blurring the boundary between crypto settlement and banking liquidity.

For FX traders, that shift matters because stablecoin movements by US institutions stop appearing as a separate crypto ledger event and start showing up as plain dollar flows. Coinbase has said stablecoins can settle around the clock, a property traditional banking rails do not share, which is part of why institutions are pushing for this kind of integration.

What to watch

Neither company has published its own announcement, so the supported stablecoin list, participating clients and any expansion beyond the US remain unconfirmed. Both firms said more capabilities are planned in the coming months, and Citi’s previously stated plan to add bitcoin custody to its framework later this year is the next concrete milestone to track. Details here are not financial advice, and crypto and stablecoin markets remain volatile and uncertain.

Written by

Emily Torres

Emily Torres covers cryptocurrency and decentralized finance for StockPil, tracking blockchain markets and regulatory developments.

Sources: ForexCrunch, Bitcoinmagazine, Decrypt