When Satoshi Nakamoto introduced Bitcoin to the world in 2008, the pseudonymous coder envisioned his decentralized currency as a reaction to the financial crisis that had crippled the global economy. But nearly two decades later, the once-renegade crypto industry has become increasingly tied to Wall Street. In the last episode of Fortune’s Cryptography Handbook (which you can find on Spotify, Apple and YouTube), Artem Korenyuk, Citi’s head of enterprise digital assets, says there is growing “synergy” between the two sectors.
After crypto’s Wild West beginnings, Wall Street became increasingly interested in digital assets as the price of Bitcoin reached hundreds, then thousands, of dollars, and other blockchains like Ethereum offered the promise of decentralized financial applications such as lending and payments that could reduce friction from existing systems. But many early pilot projects, such as the R3 blockchain consortium formed in 2015 between financial firms including Goldman Sachs and Santander, never gained traction amid regulatory uncertainty and the ups and downs of a volatile industry.
But with the Trump administration’s embrace of crypto and the passage of the Genius Act in July, which established regulations for stablecoins, Korenyuk says this time it’s different. “Blockchain is here to stay,” he says Fortune. The question, he added, is how this money will be used.
Citi has long been a pioneer in the space, notably through its Citi Token Services program, which uses a private blockchain to facilitate 24/7 payments between Citi’s institutional clients. While this is a more limited use case, particularly because it doesn’t utilize the permissionless and decentralized innovations of Bitcoin, Korenyuk says it proves that crypto’s distributed ledger technology can change payment rails through programmability. For example, financial markets have separate systems for different types of assets, such as cash, securities and debt, while tokens and smart contracts on blockchains “follow the same architecture, creating economies of scale and efficiencies,” says Korenyuk.
Whether banks like Citi will start using blockchain more widely and impact everyday customers is another question. Some have started experimenting with tokenizing different types of financial instruments such as money market funds, or issuing them on blockchains, and institutions have also considered launching their own stablecoins in the wake of the Genius Act. Korenyuk says the Securities and Exchange Commission’s work to create new regulatory frameworks for crypto has allowed Wall Street to explore new types of applications, particularly around tokenized stocks. “We definitely pay close attention to it,” Korenyuk says.
