Citi and Coinbase Develop Stablecoin Payment Service With Automatic Dollar Conversion
Citi and Coinbase Bridge Stablecoins With Traditional Banking
US banking group Citi and cryptocurrency platform Coinbase are working to expand the use of stablecoins in commercial transactions through a new payment service designed to connect digital assets with traditional banking infrastructure.
The service will allow customers to pay for purchases using stablecoins, while the funds are automatically converted into traditional currency, such as the US dollar, and deposited directly into the merchant’s bank account.
The initiative is being developed through Spring by Citi, Citi’s platform focused on institutional digital assets, and is designed to combine stablecoin payments with conventional banking settlement.
This structure would allow merchants to accept digital payments without having to hold cryptocurrencies or manage the conversion process themselves.
How the Stablecoin Payment Process Works
Under the proposed model, customers would select a supported stablecoin when completing a purchase. Coinbase’s infrastructure would process and verify the digital transaction before the payment value is converted into traditional currency and settled into the merchant’s bank account through Spring by Citi.
The model could eliminate several steps businesses currently face when receiving digital assets, including transferring funds to a separate trading platform, selling stablecoins and withdrawing the proceeds to a bank account before using the money for operational expenses.
It also separates the payment method used by customers from the currency businesses use to manage revenues and expenses.
Potential Benefits for Cross-Border Businesses
The service could be particularly relevant for companies operating across multiple markets and relying on cross-border transfers.
Businesses could offer customers an additional digital payment option while continuing to manage payroll, supplier payments, revenues and expenses through their existing financial and accounting systems.
Web3 startups and decentralized autonomous organizations, or DAOs, could also benefit from the model. Such organizations may receive revenue in stablecoins such as USDC while still requiring traditional currency to cover salaries, operating expenses and tax obligations.
Combining conversion and settlement into a single process could reduce manual intervention and simplify the movement of funds between digital-asset platforms and banking systems.
Liquidity and Settlement Remain Key Factors
Beyond facilitating payments, the service could potentially help companies manage liquidity by reducing the time between completing a transaction and receiving funds in a bank account.
However, no specific settlement timeframe has been announced. Any potential for same-day or faster settlement will therefore depend on the operational terms introduced when the service launches.
Costs will also be an important factor in determining adoption. Stablecoin transactions can involve blockchain network fees, currency-conversion spreads and payment-processing charges.
Streamlining the conversion process could reduce some operational costs, but it would not necessarily eliminate all fees associated with transactions.
Launch Date and Fees Have Yet to Be Disclosed
Citi and Coinbase have not yet disclosed several key commercial details, including which stablecoins will be supported, processing and conversion fees, transaction limits, available markets, the official launch date or the companies participating in the initial rollout.
Further details are also needed regarding which party will handle the conversion from stablecoins into traditional currency, whether Coinbase, Citi or both companies through a joint arrangement.
The structure of that process could affect both fees and operational responsibilities.
Stablecoin Regulation Remains in Focus
The development comes as regulatory attention around stablecoins continues to grow in the United States, with authorities moving toward clearer frameworks governing their issuance and use in payments.
The GENIUS Act is among the legislative efforts aimed at establishing rules for the sector, while compliance requirements, oversight and redemption risks remain important considerations for financial institutions.
Broader adoption of stablecoins will also depend on the reliability of issuers, their ability to meet redemption requests, and effective identity-verification and anti-money laundering systems across different markets.
The success of Citi and Coinbase’s initiative is likely to depend on factors including fees, settlement speed, the range of supported stablecoins and geographic availability.
The move reflects a broader effort to integrate stablecoins into conventional banking infrastructure, potentially enabling businesses to benefit from blockchain-based payments without requiring merchants to hold digital assets or overhaul their existing financial systems.