Citigroup is showing an unexpected interest in stablecoins and crypto ETFs; it might offer custody services for these assets’ collateral.
Stablecoins might be the more viable option, as Coinbase already has an overwhelming head start in the ETF collateral market. Even if these plans don’t work out, the firm is nonetheless considering other stablecoin pilot programs.
Firms like Tether have chosen some strange methods to custody their assets, but a bank would have plenty of infrastructure for the challenge:
“Providing custody services for those high-quality assets backing stablecoins is the first option we are looking at,” claimed Biswarup Chatterjee, global head of partnerships and innovation for Citigroup’s services division. Crypto ETFs are also a possibility, as “There needs to be custody of the equivalent amount of digital currency to support [them].”
Still, there are many types of crypto collateral, and the firm has many options if it wants to pursue this.
Meanwhile, Citigroup might still engage with the stablecoin market. It’s considering using this technology to speed up payment channels, especially between international clients. President Trump’s laissez-faire crypto reforms make this idea much easier.
For now, though, Citigroup won’t commit to any concrete strategies. The bank’s public comments on the subject are encouraging, but it could still back away from this sector altogether.
Welcome to the US Crypto News Morning Briefing—your essential rundown of the most important developments in crypto for the day ahead.
Grab a coffee as we discuss the growing influence of stablecoin issuers in the US Treasury market. With growing institutional adoption and regulatory legitimization of US dollar-pegged stablecoins, experts warn of artificial inflation of demand for the dollar.
Crypto News of the Day: Using Government Debt Instruments To Back Digital Dollars is Risky, Keiser Warns
The influence of stablecoin issuers in the US is growing, so much that Tether, which already issues the USDT stablecoin, plans to launch a US-only stablecoin by 2025. Tether aims to position stablecoins as strategic financial tools under the Trump administration.
Stablecoin supply by issuer in billions of US dollars. Source: Bain & Company
This chart shows Tether’s dominance in the stablecoin market, with overall supply going from $2 billion to more than $200 billion in recent years.
Meanwhile, the US Treasury projects stablecoins could reach a $2 trillion market by 2028, which could attract more players.
Nevertheless, as stablecoin influence in the Treasury market grows, the House Financial Services Committee is concerned.
Perhaps, however, the greater concern is stablecoin issuers’ using Treasury yields to buy Bitcoin. According to experts, this could undermine US government reserves.
A recent US Crypto News publication indicated reports of stablecoin issuers using Treasury yields to buy Bitcoin. Some say this could undermine initiatives like the proposed US Strategic Bitcoin Reserve, which aims to bolster national holdings of the pioneer crypto.
Growing Influence of Stablecoin Issuers in US Treasuries Market is Concerning, Max Keiser Says
Among them is Bitcoin pioneer Max Keiser, who voiced concerns over the growing influence of stablecoin issuers in the US Treasury market. Keiser warns that their use of government debt instruments to back digital dollars may have broader implications for the global financial system.
As of Q1 2025, Tether reported holding nearly $120 billion in short-term US Treasury securities and reverse repos. This makes it one of the largest non-sovereign holders of American government debt.
Meanwhile, Circle, issuer of USDC, disclosed more than $22 billion in Treasury bills in a February 2025 attestation.
These holdings collateralize dollar-pegged stablecoins, helping issuers maintain liquidity and trust. The issuers benefit from the interest income generated by the bonds.
While this practice is common and legal, Keiser contends it contributes to deeper systemic issues tied to fiat currency dynamics.
“This is exactly why the stablecoin issuers are buying Bitcoin, this is called a speculative attack on the US dollar. Feeding the debt spiral with fiat stablecoins, buying treasury bills, and then investing the interest into Bitcoin, allowing the stablecoin issuers to buy billions in Bitcoin for free,” Keiser told BeInCrypto.
Stablecoin issuers purchase US debt on secondary markets and earn interest, which they may or may not deploy into digital assets like Bitcoin. Keiser is critical of the broader financial architecture underpinning stablecoins.
“Issuing new stablecoins backed by US T-bills printed out of thin air is not a monetary system, but a financial hologram,” he said.
US Treasury bills are debt instruments issued by the federal government and sold to investors, including private companies like Tether and Circle, through regulated markets. These stablecoin issuers tokenize existing fiat currency held in reserve.
Keiser elaborated on what he sees as the long-term consequences of this model.
“It’s a speculative attack by private banks. It is financial repression, pushing rates down as ‘malinvestments’ increase. It is rinse and repeat,” he explained.
His critique also extends to the broader outlook for the US dollar, which, according to the Bitcoin pioneer, “is a quick, deadly fix; a USD hospice. Cue the final death throes of the US dollar.”
BeInCrypto has contacted Circle and Tether for comment and will update this article if they respond.
Max Keiser Proposes AI To Invent Novel Security Structures
Keiser also highlighted what he views as an emerging trend. He said high-profile investors and technologists use artificial intelligence (AI) and novel corporate strategies to increase Bitcoin exposure.
The Bitcoin maxi referenced Strategy Executive Chair Michael Saylor and investor-turned-politician Vivek Ramaswamy.
“Financial engineers like Michael Saylor and Vivek Ramaswamy are using AI to invent novel security structures to maximize the Bitcoin Treasury model. Vivek Ramaswamy plans to take his company, Strive Asset Management, public by merging with Asset Entities and starting to accumulate Bitcoin using the model that Saylor’s Strategy has already successfully adopted — using proceeds from stock and debt issuance,” Keiser remarked.
Though no confirmed public filings detailing Ramaswamy’s use of AI in this context, Keiser sees these developments as significant.
“The results are redefining finance globally and adding significantly to the Bitcoin demand. OG’s like myself, who have watched Bitcoin outperform everything for 15 years, are seeing, for the first time, investment strategies that are outperforming Bitcoin, and the implications are profound,” he said
Keiser believes such strategies could push Bitcoin’s market value even higher. He also implied that the extraordinary compounding rates of the past could be extended. This sentiment comes as Bitcoin captures more of the total addressable market and scales even higher price points.
The views expressed are those of Max Keiser and do not necessarily reflect the opinions of BeInCrypto.
Chart of the Day
International holdings of US Treasuries in billions of dollars. Source: Bain & Company
This chart shows that stablecoins have become a large holder in US treasuries.
Byte-Sized Alpha
Here’s a summary of more US crypto news to follow today:
Data shows that many public companies and crypto whales are ramping up their ETH holdings, while on-chain activity is heating up.
These factors provide a solid foundation for ETH’s bullish momentum, with analysts setting short-term price targets as high as $7,000.
Positive Data
The current phase reveals that several public companies have accumulated significant amounts of ETH in their treasuries. For example, BitMine announced it is holding approximately 1,150,263 ETH (at around $4,311 per ETH).
Similarly, SharpLink (SBET) is reported to be another major player in this space, holding roughly 521,939 ETH.
In addition, an eye-catching transaction reported by OnchainLens showed that a whale has accumulated nearly 60,000 ETH across multiple platforms. Ethereum ETFs broke $1 billion in net inflows on August 11, with BlackRock’s ETHA leading the charge, signaling institutional interest.
At the infrastructure layer, on-chain data indicates that the amount of ETH locked for staking has reached an all-time high. Token Terminal recorded staking value exceeding $150 billion. At the same time, ETH reserves on exchanges have dropped to a record low of about 18.9 million ETH, according to Axel_bitblaze69.
Together, these indicators reduce the available supply for sale and can catalyze price growth.
Tokenized assets are also heavily concentrated on Ethereum. Token Terminal reported that roughly 58% of publicly tokenized assets are on Ethereum, reinforcing the view that Ether directly benefits from capital inflows into RWAs and tokenization.
Short-term ETH price targets
Alongside these positive on-chain indicators, ETH also forms a promising technical pattern. Analyst Gert van Legen observed that ETH has fully broken out above a Descending Broadening Wedge pattern on the weekly chart.
“Next target: all-time high at $4,860. Ready to attack,” Gert van Legen stated optimistically.
Using Pricing Bands, analyst Ali also projected that Ethereum’s next targets are $5,210 and $6,946. With ETH currently trading around $4,300, the price would need to rise between 14% and 63% to reach these targets.
Sharing a similar outlook with Ali, analyst VirtualBacon believes ETH could reach $6,000–$7,000 this year. He noted that the price rally to $4,300 has opened the door for much higher levels by year-end.
“If #Bitcoin pushes toward $150K and ETH/BTC climbs to 0.044, $ETH could hit $6,000–$7,000 this year. My conservative target? $6,600,” VirtualBacon stated.
From another bullish perspective, analyst Crypto Patel also saw strong short-term upside potential for Ethereum, especially if it breaks above the $4,400 level.
The combination of strong spot market demand, active derivatives trading, with high open interest and significant short positions, and reduced supply due to staking and exchange outflows creates ideal conditions for a sharp rally—potentially in a parabolic form.
However, Patel cautions that selling pressure could emerge if the price fails to break above $4,400 and instead reverses downward.
