According to Yahoo News, Citigroup has become the first digital custodian participant of the BondbloX Bond Exchange (BBX), as announced by the securities solutions management unit of the global investment bank on Friday. Launched in 2020, BBX is the world's first fractional bond exchange, aiming to simplify bond investing.
The deal will allow Citi's clients who meet specific criteria to participate in the exchange and trade bonds, with the investment bank providing settlement and custodial services. Nadine Teychenne, head of digital assets for Citi Securities Services, stated that the proprietary digital custody technology is scalable and will enable the bank to provide settlement and custody services for clients investing in assets issued on permissioned blockchain networks and digital financial management information systems (FMIs).
This partnership is an extension of Citi's initial selection by BBX in 2021 to act as a custodian for the underlying bonds issued and traded on its exchange as fractionalized assets. Rahul Banerjee, CEO and co-founder of BondbloX, believes that digital custody is the next significant step in the transformation of the bond market, making it more transparent, electronic, and accessible to all.