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Citigroup Is Preparing to Trade Bitcoin Futures on the CME

According to a source inside the bank who requested anonymity, Citigroup (NYSE: C) is seeking regulatory permission to begin trading bitcoin futures contracts on the Chicago Mercantile Exchange (CME).

As bitcoin resumes its rise above $50,000, the bank is reported to be seeing an increase in customer demand for cryptocurrency exposure. Citi would join sister megabank Goldman Sachs in providing bitcoin futures trading, but it is still awaiting regulatory clearance.

Citi is actively recruiting people to join a crypto-focused team in London, according to a second source familiar with cryptocurrency derivatives markets. 

“The team is likely to win approval to begin trading CME bitcoin futures first, followed by bitcoin exchange-traded notes (ETNs),” the source said.

“We are being extremely cautious about our approach given the numerous uncertainties surrounding regulatory frameworks, supervisory expectations, and other factors,” a Citigroup spokesman told CoinDesk via email. “For some of our institutional customers, we are now exploring products such as futures, which operate under strict legal frameworks.”

CME grabbed the top position on the list of the largest bitcoin futures trading platforms in January, suggesting that institutional involvement is continuing to grow.

A growing number of large banks are getting into cryptocurrency, typically via cash-settled contracts that follow cryptocurrency prices. According to CoinDesk, Bank of America's prime brokerage division began clearing and settling bitcoin exchange-traded products (ETPs) for hedge funds in Europe in July.

Citigroup, one of the biggest banks in the United States, is in charge of $23.7 trillion in assets. Citi established a cryptocurrency-related business unit in June as part of the bank's wealth management division. According to a Financial Times story from May 2021, Citi was reported to be considering cryptocurrency trading and custody.

Citi's U.K. trading platform began selling ETH ETNs to customers during the previous crypto bull run in 2017. However, when bitcoin's price fell in 2018, demand for the goods fell, and the sale was canceled.

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