Citi-Coinbase deal will let companies accept stablecoin payments

Citi's deal with Coinbase will let big companies that bank with Citigroup accept stablecoin payments at checkout without handling tokens. The Wall Street Journal reported that Coinbase converts each payment into dollars. The Wall Street Journal reported that Citi then settles the money like a bank transfer. Merchants never hold the tokens. Coinbase payments customers can also get an account-style product through Citi that converts incoming cash into stablecoins. The tokens stay at Coinbase and earn a reward of 3.75% a year. The Clarity Act failed in the Senate on September 15. The bill lost a procedural vote 49-50. It needed 60 votes. The Wall Street Journal reported that a fight over stablecoin rewards helped sink the bill. A day before the vote, eight banking groups asked senators to ban those rewards. The groups warned that interest-paying tokens could drain bank deposits. The groups wrote that declining deposits reduce credit availability that supports communities and pathways to upward mobility. The Financial Services Forum signed the letter. The Forum said its chair is Citi CEO Jane Fraser. Citi said the Senate defeat would not change its work. Citi's head of services, Shahmir Khaliq, said the company was not hampered and would continue operating within its banking license and current regulations. No merchants using the service were named. No launch date was given. Citi is also bringing its private blockchain for moving company cash to Japan and the United Arab Emirates.