Citi Securities Services has become the first digital custodian on the BondbloX Bond Exchange (BBX), the world's first fractional bond exchange using the latest in distributed ledger technology.
Launched in 2020, BBX seeks to simplify bond investing by allowing investors to track and trade bonds electronically. By fractionalizing full-sized bonds, the exchange allows a broader range of investors to participate in the trading.
Citi clients that meet certain criteria can now become BBX participants and start trading bonds (both fractionalized and full-sized) almost immediately, with the bank providing settlement and custody services at the back end.
Since 2021, Citi has acted as a custodian for the underlying bonds issued and traded on the exchange as fractionalized assets. The expanded partnership unlocks additional opportunities and benefits for Citi's clients as well as other BBX participants. In addition to benefiting from the services of a digital custodian, participants gain wider access to the global bond market, greater diversification of their investment portfolios, and immediate settlement at the point of trade execution.
Nadine Teychenne, head of digital assets at Citi Securities Services, says the bank’s proprietary digital custody technology is scalable, enabling it to connect to newly permissioned networks as they emerge and provide a fully consolidated custody service through a single operating model.