Citi takes significant step in revolutionizing the global bond market

Wall Street firm says it is investing in the future of digital financial market infrastructure.

The world’s first fractional bond exchange using the latest in distributed ledger technology now has Citi Securities Services as its first digital custodian participant.

BondbloX Bond Exchange, or BBX, launched in 2020 and allows investors to track and trade bonds electronically. It has been hailed as a significant step in a bond trading revolution. By enabling investors to trade in fractions of full-sized bonds, it is also seen as bringing many of the benefits of the equities market to bonds.

Citi clients, subject to certain criteria, will be able to begin trading both fractionalized and full-sized bonds on the BBX almost immediately, with Citi providing seamless settlement and custody services at the back end.

“Today’s announcement demonstrates our commitment to investing in the future of digital financial market infrastructure by building products and services to support the current and future needs of our clients,” said Matthew Bax, global head of Custody for Citi Securities Services. “We are committed to partnering with BondbloX on their journey to transform and simplify bond trading and investing.”

PARTNER SELECTION

BBX participants, whether they are Citi clients or not, will benefit from Citi’s digital custodian services and will gain wider access to the global bond market enabling greater diversification of their investment portfolios, and immediate, atomic settlement at the point of trade execution.

“The decision to partner with Citi was an easy one, given their reputation as a leading securities services provider and our history of collaboration,” commented Dr. Rahul Banerjee, CEO and Co-Founder of BondbloX. “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.”

Citi has been involved with BondbloX since 2021 when it was selected to act as custodian for the underlying bonds issued and traded on its exchange as fractionalized assets (which are called BondbloX).

“This proprietary digital custody technology is scalable and will allow us to provide settlement and custody services for clients investing in assets issued on permissioned blockchain networks and digital FMIs. It enables Citi to connect to newly permissioned networks as they emerge and provide a fully consolidated custody service through a single operating model,” said Nadine Teychenne, Head of Digital Assets for Citi Securities Services. “To develop this service, we leveraged our expertise in exchange-traded settlement and custody services which we provide today in around 70 FMIs globally.”