Jpmorgan And Citi Take Payments Rivalry Onto The Blockchain

TITLE: JPMorgan and Citi Take Payments Rivalry Onto the Blockchain CHANNEL: Bloomberg Television DATE: 2026-04-19 ---TRANSCRIPT--- I’m Emily Mason. I’m a fintech and crypto reporter with Bloomberg News, and I’m here today with Umar Farooq, Global, co-head of Jp morgan Payments as Sameer Hollick, head of services at Citi to talk about Stablecoins and deposit tokens, two of the hottest technologies in digital assets, especially after the passage of the first federal regulatory framework for Stablecoin issuers, The Genius Act. So just so kind of set a groundwork for our conversation. Stablecoins Are digital assets designed to track the value of U.S. dollars one for one. They’re typically backed by reserves made up of short term treasuries and cash. There’s a lot of different types of stablecoins they can track other types of currencies. But for our conversation, that’s kind of the most relevant. And then deposit tokens are digital assets are like digital representations of bank deposits on a blockchain. Exactly right. So just to kind of kick it off, it would be great to hear kind of like a one sentence descriptions of the platforms that you’ve built, working with deposit tokens, and then also what client problem that you are trying to solve. Sure. So in Jp morgan, I think we’ve been at this technology working on it for about a decade now, and we have built a significant sized platform in-house called Can Access, which has deposit accounts, tokens, securities on it. So it’s like, you know what, it’s basically like a public blockchain, but within Jp morgan’s four walls. And then we also recently issued deposit tokens on other public shares. Is that, you know, for Citi, we’ve been on this journey given the fact that we’re in 90 markets around the world with the biggest global footprint. Our focus has always been in serving the big multinationals who work with us has always been on being able to move money around real time, 24 seven across the globe. So that’s always been an interest. So what we’ve done using blockchain is really an add on to what I would call our existing strategy of thinking about 24 seven movement of money, 24 seven payments around the world, and the ability to move payments, money, liquidity and settled securities in cash around the world. And the real client problem that we were looking to solve is the ability for large multinationals, big banks and broker dealers and fintechs to be able to move their money around, make payments seamlessly around the world. 24 seven. Could you give like an example of a transaction and how it would work with Citi Token Services versus how it would go with like the existing infrastructure? So so maybe you might if I can go first and you know, so so if I think of the existing infrastructure, we’ve actually thought about that as two separate parallel rails and then we look to connect those rails. So in what I would call the conventional rails, banking rails, if you think about the clearing brought up where banks correspondent banks send money around the globe, what we were doing was effectively using banks, using swift messaging service to move money around and effectively message banks and using our central clearing account at the Fed to be able to move money between banks to enable the movement of US dollars around the world. What this infrastructure does is in fact use exactly the same outcome, but on different technology, which is blockchain. So effectively that technology allows us to do atomic settlement, instant settlement of that of that payment of that remittance across different jurisdictions. So outcome is the same. What we’re trying to do is effectively now link conventional with blockchain technology as well to allow us to bring more players into the into the entire ecosystem of moving money around the world. Could you share like some adoption stats today? Like how many clients do you have or some volume figures just to kind of put aside the scope on it? So I think for us, again, in quite a few clients, we’re moving the sort of 2 trillion of which many AFIS are on the platform, on the actual blockchain, and this is external facing blockchain where people come in and it’s because that’s really where the delta is. We are doing at this point, you know, high single digit billion purely in blockchain terms, like tokens actually moving. People are actually facing off of these. And we believe that that volume at this point in terms of a pure blockchain network with proper tokens that clients can execute on, programmability is actually higher than any stablecoin in the world doing B2B. So if you look at the Stablecoin market, you can look at many studies, you can look at like there’s a BCG study, McKinsey study, there’s like studies up the wazoo. So Citi is moving about the same close to ,000,000,000 or thereabouts on a daily basis. They’re different clients with different genders. There are clients who will move money once a day or once a week because it’s a holiday schedule or they’ve run into a holiday schedule in a particular market and they want to fund up it at a particular point of time. Then the other clients who are moving billions of dollars date. So there is a vast, what I would call dispersion of use cases across these various types of clients. Do you expect any more competition on the B2B flows as stablecoin companies try to get access to five master accounts via their National Trust charters? Like, is that something that worries you at all? And then also kind of the deposit flight narrative like if stablecoin issuers are able to. Offer yield or rewards. Like, are you worried about deposit flight? The point that I think we’ve all made as banks is that if you’re a bank, you should have a bank charter. You should be regulated like a bank. You are if you are purporting to carry out what transactions that look like and sound like a bank, you should have the same capital, you should have the same liquidity rules and the same supervision and oversight as part of the agendas. So first of all, I a line which is the bank’s point of views are very clear and it’s less about what you have access to, what job you have, etc.. It’s essentially if you’re taking the same sort of risk, you should have the same sort of risks, you know, sort of making sure that you are monitored in a similar manner. Because if you look back at history, I think a lot of times things are blown up and they always blow up starting with leverage. And leverage always starts because someone wants to do something so they can pay out a higher number. So we have liquidity controls. We have to look at all kinds of internal compliance for processes. We have stress testing. We have basically, you know, global financial crisis. We’re doing AML screening like we do a bazillion things to move every dollar that we milk retail, wholesale. So those things have to be done. And I frankly feel that the risk is not so much to the cities and the JPMorgan’s of the world because we have the infrastructure and we have the investment wherewithal to actually invest and innovate. I do think the risk there is risk to the smaller banks, community banks, what actually vital to how the US system operates and how credit gets generated at the local community level. And I think they also have been quite vocal on this because I feel they have the bigger sort of threat vector from this. Mm hmm. Well, and what about like, I guess, finding ways to work with Stablecoins? Like, Jp morgan has stayed pretty focused on deposit tokens. Citi has said it might issue its own Stablecoin It’s working with Coinbase to integrate Stablecoin payments. Like, how are you thinking about working with Stablecoin? No issues but working with a stablecoin company? I think it’s a use case by use case thought process. So from providing banking services, if you look at, you know, some of the stablecoin companies that have gone public, they are good friends of ours and clients of ours and we, you know, serve them. That being said, I think if there was a real demand from our clients to do that, we would go down that path. So I think it’s not so much that we have some sort of like an existential sort of, you know, fear or some knee jerk reaction to stablecoins. It’s just there’s not demand from our clients at this point, especially on the old sell side, which would compel us to build up, you know, those products. I would just second what Omar said. I would say a lot of the Stablecoin issuers, or at least the top tier, the top two, three, four or five issuers, you know, they would they would be clients of ours. And we we appreciate their business. We work with them every day. We are looking to help them manage their reserves. We’re looking to, you know, advise them as they think about the capital markets where we’re helping them across the board when our clients come to us. If you’re a company on the West Coast, if you’re a fintech in Asia, if you come to us and say, I’ve got an app developer that needs to get paid in a particular stablecoin in a particular jurisdiction, I’m sure that whether it’s Citi or whether it’s Jp morgan, we will listen to our client and we will engineer that app developer to get paid in that stable. By definition, that means we will be working with an interoperability agenda and ability to provide and procure for our client that particular stablecoin and execute that payment for the beneficiary. Do you have any projections of like how much you plan to invest over the next couple of years, like in this space particularly? What I would say is, and we’ve talked about this publicly, that we’re investing about a billion and a half dollars every year just in the services business across the board. And and it’s actually a it’s a significantly high number. We’ve significantly increased this number over the last several years. So for us, I mean, again, we haven’t disclosed the number publicly, but let’s just say it’s not a few somewhere, but we have a slightly different approach, which is we do what you are saying, which is we are uplifting a lot of our core platforms. You’ve been doing it for years and years because you almost I mean, we said it actually at our Investor Day about a year ago. That’s an ongoing journey. You know, you’re always modernizing stuff, but we do carve out specific, significant investment on these topics. So in particular, this year, we are, you know, like previous years, we’re doing a lot of investment in blockchain, especially as you think about public blockchain infrastructure and what do we do there? They’re doing a lot of investment on AI, especially in terms of like how do you, you know, sort of accelerate because this could be a game changer in other ways when it comes to agenda commerce and agenda payments, because we have both the commerce side of the payment side. So those things we are investing quite heavily in, We’ve never actually discussed the number, but I will tell you that there’s several hundred full time people on the Connectors platform and we have more than a couple of hundred full time engineers who have been around a long time. And frankly, I always tell people like in know it’s you can teach people blockchain, it’s quite hard to teach people how to do blockchain in a large bank as far as like closing thoughts, like. What are your next, like, practical execution goals in this space specifically? So I think for us, two or three things come to mind. Again, we want to keep building on the public chain stuff we have now tokenized money market funds with our asset management business through can access. We have tokenized deposit tokens, we have a full tokenization engine, we have quarter infrastructure. So we basically want to battle want a battle hard like right now the volumes are still low on the public chain, but that could take you know, that could take off. And so we are hardening that. We are actually thinking about core infrastructure a lot. And again, it’s not a secret. I’ve said this in many forums. I do believe that the world needs better infrastructure, better code infrastructure, which is more compliant in terms of public chains. It’s actually also not a rent seeking mechanism where you kind of get stuck and then the fees go up and the performance is good and the privacy levels are right. So we are thinking about that quite a bit, both by ourselves and with some of our partners in terms of what that could look like. And then we are also up by, you know, building on our interoperability sort of work quite a bit. And then there’s all this there are you I mean, now that you open the Pandora’s box of programmability, I can tell you like clients. I mean, there’s no lack of ideas. So you have to then figure out which ideas you want to blend, which ideas you, you know, sort of want to be proud days. So I will tell you, if I look five years out, I would say, you know, this is a world that is going to change radically driven by A.I. and blockchain use. And so so the question is, how do we at City think about that future? And so for us, as I mentioned, you know, that is really the crux of how we’re thinking about driving that entire agenda around our platform. And one of the things that we’re very convinced on is that why we build out some of these capabilities, there are things that we will do what I call in-house, which is the ability to offer our clients to to move money within the city network, the ability for them to move funding on conventional rails, on blockchain. We’ve got an agenda around that. And we we’ve accelerated it. We’ve talked about 800 clients onboarded. We expect to significantly increase that number as we go through this year. But I think we’re this rising tide that’s going to lift all boats is really around interoperability. So one of the big things that we’re working on this year is to say, how do we take our token? And, you know, as we think about that partnership with infrastructures, as we think about that use case around being out in a stablecoin for an app developer, for example, for for a West Coast client, as we think about the ability to tokenize and custody crypto. Those are all things in our book of work that we’re looking to build. Well, thank you both so much for the time. This is really fun. Thank you. Thank you so much. Thank you.