Citigroup Becomes First Digital Custodian on BBX Platform

Citigroup Inc.’s C securities solutions management unit, Securities Services, becomes the first digital custodian participant of BondbloX Bond Exchange (“BBX”). BBX is the world’s first fractional bond exchange.

BBX was rolled out in 2020 to simplify bond investing by enabling investors to track and trade bonds electronically. By fractionalizing full-sized bonds and introducing many benefits of equities trading to the bond market, the platform made bond trading more accessible to a broader range of investors. It now provides the provision of settlement and custodial services in the BBX market.

The partnership facilitates Citigroup’s clients to meet certain criteria to become BBX participants and instantly start trading bonds. Citigroup will provide seamless settlement and custody services at the back end and use the latest in distributed ledger technology in the partnership.

The recent partnership extends the initial collaboration between the two companies in 2021 when the bank was chosen to act as custodian for the bonds issued and traded on the BBX exchange as fractionalized assets.

The extended relationship offers additional opportunities and benefits for Citi’s clients and other BBX participants. Specifically, participants get wider access to the global bond market, which enables greater investment portfolio diversification and immediate settlement at the point of trade execution.

Per BondbloX management, “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.”

Nadine Teychenne, head of digital assets for Citi Securities Services, noted, “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.”

The partnership underlines the bank’s continued efforts to develop digital asset solutions using a set of shared technology capabilities and a common strategic approach. This will then enhance Citigroup’s products and services, including digital money, securities, trade, custody, asset servicing and collateral mobility.

Over the past six months, shares of Citigroup have declined 3.7% against the industry’s rise of 5%.

Currently, Citigroup carries a Zacks Rank #3 (Hold).

Finance Stocks Worth a Look

A couple of better-ranked stocks from the same industry are First Business Financial Services FBIZ and Mercantile Bank MBWM.

FBIZ’s current-year earnings estimates have been revised marginally upward over the past 30 days. Its shares have gained 3.5% over the past three months. The stock currently carries a Zacks Rank #2 (Buy).

The consensus estimate for MBWM’s current-year earnings has been unrevised over the past 30 days. Over the past three months, FFIC’s share price has gained 11.5%. The stock currently carries a Zacks Rank #2.
Citigroup Inc. (C): Free Stock Analysis Report

First Business Financial Services, Inc. (FBIZ): Free Stock Analysis Report

Mercantile Bank Corporation (MBWM): Free Stock Analysis Report

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