Citi Securities Services becomes first digital custodian on world's first fractional bond exchange

Citi’s partnership with BondbloX Bond Exchange allows clients to trade fractionalised and full-sized bonds almost immediately.

Citi Securities Services announces that it is the first digital custodian participant of BondbloX Bond Exchange (BBX), the world's first fractional bond exchange, regulated as a Recognised Market Operator by the Monetary Authority of Singapore (MAS).

BBX, which is based in Singapore, was launched in 2020 to allow investors to track and trade bonds electronically. It is backed by Citi and MassMutual Ventures.

According to Citi’s release dated Sept 15, this partnership enables Citi’s clients to become BBX participants and begin trading both fractionalised and full-sized bonds almost immediately, provided that the clients meet certain criteria. Citi will provide settlement and custody services at the back end.

Citi was chosen by BBX in 2021 to act as its custodian for the underlying bonds issued and traded on its exchange as fractionalised assets, called BondbloX. This announcement of an extended relationship means that Citi’s clients will be able to gain wider access to the global bond market. This can enable greater diversification of their investment portfolios with immediate atomic settlement at the point of trade execution, according to the release.

“Today’s announcement demonstrates our commitment to investing in the future of digital financial market infrastructure (FMI) by building products and services to support the current and future needs of our clients,” says 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.”

“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,” says Nadine Teychenne, head of digital assets for Citi Securities Services. “To develop this service, we leverage our expertise in exchange-traded settlement and custody services which we provide today in around 70 FMIs globally.”

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