Citigroup is one of the largest currency trading banks, which is planning to take its first step into the cryptocurrency market after its surge.
As per Itay Tuchman, the group is the latest banking giant for considering pushing into the new markets. Despite the reputational challenges, the large dealers are being forced to respond to the surging interest in bitcoin from asset managers and hedge funds.
Tuchman says that the bank has not yet decided whether it will offer its clients cryptocurrency services or not. But he is saying that the custody, trading, and financing are all under consideration.
Tuchman said that there are different options from their perspective, and they are considering un which aspect they can offer the best service to their clients. This is not at all going to be a prop-trading effort. In March, Citi issued a 108-page report saying that despite having a host of risks and obstacles coming in the way, the cryptocurrency “may be optimally positioned to become the preferred currency for global trade.”
The price of bitcoin, by volume, has dropped by 12% from its record high from last month. However, it is still up with 75% from the starting of the year and trading near $57000 on Thursday.
Goldman Sachs, State Street, and Bank of New York Mellon are among the largest institutions, which are recently announcing their plans to become much active in different areas of the cryptocurrency market.
Tuchman said that Citi had witnessed a much rapid accumulation of interest in bitcoin across a wider spectrum of clients. It even includes large asset managers. Some have also asked the bank for research, and others are wanting to trade a range of coins through the bank and finance deals along with cryptocurrency holdings.
“We shouldn’t do anything that’s not safe and sound. We will jump in when we are confident that we can build something that benefits clients and that regulators can support,” he said.
Insiders of the large crypto trading firms are much skeptical that the conventional banks will be capable of competing against bitcoin specialists.
Galaxy Digital, a New York-based firm, on Wednesday unveiled a $1.2 billion deal to purchase BitGo. BitGo, which is having $40 bn in assets, is already offering services like custody, portfolio management, along prime lending.
Tuchman said Citi does not want to rush to decide on how deeply it should move inside the crypto market. They are not having any fear of missing out as they believe that crypto is here to stay. This is just the beginning of the market. It is not at all a space race as there is more room for more than only one flag.