According to Fixygen, Citi, one of the largest U.S. banks, and the cryptocurrency platform Coinbase have expanded their partnership in the areas of corporate payments and stablecoins.
Coinbase announced this on September 28.
As part of the partnership, Coinbase has selected Citi’s Virtual Account Wallet technology for its Coinbase Virtual Accounts system. This will allow clients to receive traditional funds into virtual accounts, with the proceeds then automatically converted into stablecoins.
At the same time, Coinbase’s payment infrastructure is being integrated with Citi’s corporate service, Spring by Citi.
This will enable Citi’s institutional clients to accept payments in stablecoins, using Coinbase’s infrastructure for processing digital assets and Citi’s banking infrastructure for traditional settlements.
This partnership signals a further convergence of traditional banking payments and public blockchain infrastructure.
For businesses, this model allows them to use stablecoins as a payment instrument without having to build their own infrastructure for storage, conversion, and interaction between bank accounts and the blockchain.
At the same time, Citi is developing its own tokenized payments infrastructure. In September, the bank also announced that it had conducted real dollar transactions via the Swift blockchain ledger in collaboration with First Abu Dhabi Bank and OCBC.
The expansion of the partnership between Citi and Coinbase is taking place as the U.S. is developing a separate regulatory framework for payment stablecoins and the Federal Reserve is drafting detailed requirements for their issuers.
