“There are different options from our perspective and we are considering where we can best service clients. This is not going to be a prop-trading (proprietary trading) effort,” said Citi’s Itay Tuchman, who heads up global foreign exchange. In other words, it doesn’t plan to trade for its own account.
Numerous institutions have started to offer cryptocurrency services. Most of the activities fit neatly into three buckets, servicing wealth clients, custody and trading. Examples of providing investment opportunities to clients include Goldman Sachs, Morgan Stanley, BBVA and DBS Bank. Others aim to provide custody services such as BNY Mellon, Standard Chartered, which has partnered with Northern Trust, and ING through Pyctor, which has partnered with multiple top-five conventional custodians, including State Street.
The third route is trading. Goldman Sachs recently reopened its trading desk, and today Bloomberg reports it’s offering trading of non-deliverable Bitcoin forwards, which settle in cash, with Cumberland TRW as its trading partner. It hedges positions using CME bitcoin futures and hence doesn’t have to deal with physical custody of Bitcoin.
Back to Citi, “I don’t have any FOMO [fear of missing out] because I believe that crypto is here to stay and that we are just at the very beginning of the market,” said Tuchman. “This isn’t a space race. There is room for more than just one flag.”
It’s worth noting that Citi is an investor in Cobalt FX, which provides a foreign exchange post-trade platform used by Citi. The company expanded into digital assets last year.