An increase in demand for services in the cryptocurrency space has now prompted Citigroup Inc to closely consider offering some of its institutional customers the services of bitcoin futures trading, a spokesperson for the bank said earlier this week.
After adapting to a crackdown on cryptocurrency mining in China by authorities of the country on domestic cryptocurrency mining companies earlier this year, the price of bitcoin increased past the $50,000 mark earlier this week with investor confidence being boosted by wider mainstream adoption of the cryptocurrency by corporations and the wider public.
Citi is awaiting regulatory approval to begin trading bitcoin futures on the Chicago Mercantile Exchange, media outlet Coindesk reported earlier on Tuesday citing a sources within the bank.
“Given the many questions around regulatory frameworks, supervisory expectations, and other factors, we are being very thoughtful about our approach,” a Citi spokeswoman said in an email to the media.
“We are presently considering products such as futures for some of our institutional clients, as these operate under strong regulatory frameworks,” she added.
Earlier in May this year, a report by the Financial Times had claimed that the bank was weighing the option of providing cryptocurrency related services.
The Financial Times report had quoted Itay Tuchman, Citi’s global head of foreign exchange, saying that the bank had witnessed a “very rapid” increase in interest and demand by its large institutional clients in bitcoin since August last year.
“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 effort,” Tuchman said in the report in reference to proprietary trading in which banks trade with their own money to make a profit.
T that time however the bank had said that it was in no hurry to offer the services. The decision to apply for regulatory approval for offering cryptocurrency services would be taken by the bank after it is confident it would be able to build something that benefits clients and that regulators can support, Tuchman had said.
“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,” he said. “This isn’t a space race. There is room for more than just one flag,” he was quoted in the report.
In a report published by Citi Group earlier in March this year, he bank had said that bitcoin could become “an international trade currency” with its further evolution, “Perceptions about what makes bitcoin important continue to evolve and create new opportunities while increasing its perception towards becoming mainstream,” the bank had said in the report at the time.
In a report in July, Business Insider had claimed that that another American banking giant JPMorgan Chase & Co was also set to allow its customers in its wealth management business to access to cryptocurrency funds.
(Adapted from NDTV.com)