Several banks are contemplating taking the first step into the cryptocurrency markets after seeing a rise in interest from clients. According to a memo obtained by The Block, Citigroup Inc. C, which has been planning to enter the crypto space for a long time, is one of the latest global banks to offer digital assets services for its wealthy clients by launching a business offshoot — Digital Assets Group.
The unit will be part of the bank’s wealth management division Citi Global Wealth Investments, and focus on blockchain and crypto assets. Its aspects include cryptocurrencies, non-fungible tokens, stablecoins and central bank digital currencies, according to the memo.
The memo, signed by the bank’s global head of capital markets, Iain Armitage, and global head, Rob Jasminski, said, "Given the exciting new developments we are seeing around cryptocurrencies, tokenization, and other advances powered by blockchain technology, we are pleased to announce the formation of the Digital Assets Group.”
The memo also added that the Digital Asset Group will be headed by Alex Kriete and Greg Girasole, in order to develop related products and work in line with the bank’s partners, the broader equity markets as well as Citi Investment Management teams to establish a sound value proposal for investors.
Our Take
Such a move by Citi will likely further boost the world’s most popular cryptocurrency asset’s prospects, at least on grounds that a major bank, with a massive global footprint, is providing cryptocurrency access to its clients.
Citi’s move follows its peer Morgan Stanley’s MS endeavor to start offering clients access to three bitcoin funds, as reported this March. Earlier in February, The Bank of New York Mellon Corp. BK became the first global custody bank to announce plans to form a new unit — Digital Assets — to help its institutional clients hold, transfer and issue digital assets.
In May, it was reported that Goldman Sachs GS has also forayed into the $1.1-trillion worth Bitcoin arena, garnering access to investors who want to place big bets by launching trading with non-deliverable forwards, i.e., derivatives tied to Bitcoin’s price, which will be cash-settled.
Shares of Citi have rallied 16.7% over the past six months, underperforming the 25.4% gain of the industry it belongs to.
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Citi currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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