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Citi becomes first digital custodian for BondbloX, plans tokenized deposits using blockchain

Citigroup with BondbloX Bond Exchange (BBX) has initiated a partnership to make bond trading more accessible

Shashank Bhardwaj
Published: Sep 25, 2023 09:01:59 PM IST

Citi becomes first digital custodian for BondbloX, plans tokenized deposits using blockchainImage: Shutterstock

On September 15, the prominent American investment bank Citi Securities Services announced it had become the first digital custodian participant of the BondbloX Bond Exchange (BBX).

The Singaporean company BBX was launched in 2020 to simplify bond investing. It made bond trading more accessible by allowing investors to monitor and exchange bonds electronically. It also incorporated the benefits of equities trading, making trading bonds more convenient.

The partnership with Citi enables Citi’s clients and other BBX participants to have access to digital custodial services, wider access to the global bond market, and immediate atomic settlement at the point of trade execution. Eligible clients will also be able to participate in BBX and trade fractionalised and full-sized bonds.

BondbloX initially partnered with Citi back in 2021, where Citi acted as a digital custodian for full-sized bonds. Now, Citi has expanded its role to safeguard fractional bonds, opening up fresh possibilities and benefits for its clients and other participants in the BondbloX platform.

“The decision to partner with Citi was an easy one, given their reputation as a leading securities services provider and our history of collaboration,” said Rahul Banerjee, co-Founder and CEO of BondbloX. “This partnership will enable Citi’s clients and others to enjoy the full benefits of bond trading, coupled with Citi’s securities services support, almost immediately. Digital Custody is the next big step in the transformation of the bond market, making bond markets more transparent, electronic and accessible to all. Now, bonds are more easily accessible to everyone.”

Matthew Bax, global head of custody for Citi Securities Services, said, “We are committed to partnering with BondbloX on their journey to transform and simplify bond trading and investing.”

Citi has also debuted a pilot program for turning customer deposits into digital tokens using a private blockchain owned and managed by itself.

“The development of Citi Token Services is part of our journey to deliver real-time, always-on, next generation transaction banking services to our institutional clients,” said citi global head of services Shahmir Khaliq.

The Citi Token Services product will transform customer deposits into digital tokens, enabling 24/7 cross-border payment services with high liquidity. These services will be processed on blockchain-based payment rails.

“With the new service, if it’s… 5:00 p.m. in the U.S. and 5:00 a.m. in Singapore, but you need to get money there, you can send that immediately, within seconds,” commented Citi’s head of digital assets, Ryan Rugg.

Citi's partnership with BondbloX and its innovative token services marks a significant advancement in finance. This venture simplifies bond trading and enhances the accessibility and efficiency of financial markets.

The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

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