Citizens Casts Wide Net in Stablecoin Race as Consortia Multiply

Since the GENIUS Act passed just over a year ago, stablecoin initiatives have proliferated, pushing banks to develop a strategy for the new payment technology. For Citizens Financial, that strategy is about playing the field, not picking a single winner.

"Banks are trying to understand which [consortiums] stick," Michael Levens, vice president and financial services payments lead at Capgemini, told American Banker. "I'd be surprised if you got a bank saying, 'This is the one we're hedging our bets on,' because they don't know."

Open Standard's Open USD is the latest digital asset consortium to emerge. It joins Early Warning Service's cross-border stablecoin initiative, SWIFT's blockchain ledger, The Clearing House's tokenized deposit play, and a Canadian stablecoin consortium. Banks and payments companies including Fidelity and Western Union also plan to launch their own stablecoins.

Citizens is one of nearly a dozen U.S. banks that have signed on as a partner to Open Standard's stablecoin. The $233-billion-asset bank is also involved with FIS's stablecoin push, TCH's tokenized deposit network, and Mastercard's stablecoin capabilities.

"We don't have all the answers; I don't think anybody does," Paul Busby, head of commercial bank strategy at Citizens, told American Banker. "This industry is going to evolve, and we need to make sure that we've got some skin in the game as a function of picking the right partners and the right kinds of outcomes."

Busby described the bank's approach as staying in step with the market's evolution. "We're looking at some of the biggest components of the market as we see it going forward, and making sure that we're staying in lockstep with the momentum across the market – effectively not wanting to be left behind – but also making sure we're staying in pace with the market as it evolves," he said. "There's a burgeoning footprint of future partners that we can start to navigate our way through, and they all bring different infrastructure to play."

Citizens' digital asset strategy began almost a year ago and spans the bank's compliance, legal, technology, capital markets, treasury and payments teams. "The impact of digital assets is a function of when, not if," Busby said.

The bank is now building out infrastructure and products before rolling them out to corporate clients in 2027. Cross-border payments and money movement, especially in emerging market corridors, are the first use case Citizens is exploring. Other potential applications include stablecoin payouts, digital wallets, and making legacy systems interoperable with new on-chain infrastructure.

"The concept of TradFi versus DeFi, they are very quickly going to converge to just financial services, and that will happen in short order," Busby said.

Getting that interoperability right across different payment schemes is critical, Capgemini's Levens said. "A bank might do a cross-border payment across a traditional Swift network, then then they might pay out a dispute or a return by stablecoin," he said. "There has to be what I'll call an 'intelligent orchestration layer' that can actually provide that."

Citizens' Alpha Score sits at 42 out of 100, labeled Mixed, in the Technology sector. Mastercard, which Citizens is exploring as a stablecoin partner, carries an Alpha Score of 70, labeled Moderate, in the Financials sector.