Citi ventures into custody for fractionalized bonds in Singapore

Citi’s securities services business will provide custody services for fractionalized and full-sized blockchain-based bonds.

Citi Securities Services, a management hub offering securities solutions, is now providing digital
custody for bonds traded on BondbloX Bond Exchange (BBX), a fractional bond exchange regulated by the Monetary Authority of Singapore.

In a press release on Sept. 14, Citi said the partnership will allow its clients that “meet certain criteria” to begin trading fractionalized and full-sized digitized bonds on BBX. The New York-headquartered bank didn’t provide criteria for accessing the exchange.

“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 financial market infrastructures.”

Matthew Bax, Global Head of Custody for Citi Securities Services

Founded in 2016, BBX settles trades with bonds on its blockchain network, where custodians deploy nodes to run consensus that share the same data, according to the information published on the exchange’s website.

In August 2023, Citi presented a comprehensive analysis of the developments and challenges faced by the digital assets and distributed ledger technology (DLT) sector. Despite the setbacks of 2022, particularly for some crypto firms like FTX, the research offered an optimistic perspective on the evolution of DLT and digital assets.

The data compiled by the bank’s analysts show a significant jump, from 47% of firms engaging with and showing interest in DLT in 2022 to 74% in 2023.