Citigroup Expands Digital Asset Services with Custodian Partnership and Tokenized Deposits
Citigroup has announced its expansion into digital asset services through a new custodian partnership and a pilot program for tokenized deposits. The global investment bank has become the first digital custodian for the BondbloX Bond Exchange, which is regulated by the Monetary Authority of Singapore. This exchange is described as the world’s first fractional bond exchange that utilizes atomic settlement and distributed ledger technology.
With this partnership, Citigroup’s eligible clients now have access to BBX’s fractionalized bond trading, with the investment bank providing settlement and custodial services. The head of digital assets at Citi Securities Services, Nadine Teychenne, stated that their proprietary digital custody technology is scalable and will allow them to offer settlement and custody services for clients investing in assets issued on permissioned blockchain networks.
Accessibility to the Global Bond Market
In addition to becoming the custodian for BondbloX’s traditionally issued bonds in 2021, Citigroup now has custody of the fractional, tokenized versions of these bonds. This development opens up these products to a wider base of institutional investors and provides BondbloX users with greater access to the global bond market, allowing for a more diverse digital asset portfolio.
The co-founder of BondbloX, Dr. Rahul Banerjee, emphasized that this partnership enables Citi’s clients and others to enjoy the benefits of bond trading immediately while making bond markets more transparent, electronic, and accessible to all.
Citigroup is also launching a pilot program called Citi Token Services, which converts customer deposits into digital tokens using a private blockchain owned and managed by the bank. This product enables instantaneous global transfers processed on blockchain-based payment rails, addressing the needs of institutional clients for a 24/7 cross-border payment service with high liquidity.
Hot Take: Citigroup Expands Digital Asset Services to Enhance Accessibility and Efficiency
Citigroup’s partnership with the BondbloX Bond Exchange and the introduction of tokenized deposits through Citi Token Services reflect the bank’s commitment to expanding its digital asset services. By leveraging distributed ledger technology and atomic settlement, Citigroup aims to provide its clients with seamless access to fractionalized bond trading and real-time, always-on transaction banking services. These initiatives not only enhance accessibility to the global bond market but also improve transparency, efficiency, and liquidity in traditional financial processes. As digital assets continue to gain traction, Citigroup is positioning itself as a leader in this evolving landscape.
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