Citi Ventures has invested in BVNK, a stablecoin infrastructure company, signaling increased institutional engagement by major U.S. banks in digital assets, particularly for cross-border payments. This move, alongside Citi's exploration of its own stablecoin and custody services, is driven by growing demand and recent U.S. regulatory clarity like the GENIUS Act, which is fostering an "explosion of demand" for stablecoin infrastructure. BVNK, now valued above $750 million and expecting profitability next year, facilitates global fiat-to-crypto payments, reflecting a broader trend among Wall Street firms like JPMorgan and HSBC to leverage blockchain and tokenization for more efficient financial transactions.
Citi has invested in stablecoin infrastructure company BVNK, the startup told CNBC on Thursday, as big U.S. banks ramp up their presence in the cryptocurrency and digital asset space. Stablecoins are a type of digital asset pegged to a fiat currency and backed by real-world assets like bonds. The two biggest are USDC and Tether, which issues USDT. BVNK’s core technology is effectively a payments rail to facilitate transactions in stablecoins globally, allowing customers to move money from fiat into the cryptocurrency and back. The company declined to disclose the sum that Citi invested or its current valuation. But Chris Harmse, co-founder of BVNK, told CNBC in an interview that its valuation is higher than the $750 million that was publicly disclosed at its last funding round. The investment was made by Citi Ventures, the venture capital arm of Citigroup. Stablecoins, once just a tool for people to trade quickly in and out of other cryptocurrencies like bitcoin, are now being seen as a potential key tool for cross-border transactions due to the speed to send and receive them, the low cost and 24/7 settlement. There were nearly $9 trillion worth of stablecoin transactions over the last 12 months, according to Visa, while the current valuation of all stablecoins in existence stands at over $300 billion, Coinmarketcap data shows. U.S. growth BVNK’s Harmse said the company is seeing momentum, especially in the U.S., which has been its fastest-growing market over the last 12-18 months thanks to what is seen by the crypto industry as a more favorable regulatory environment. Earlier this year, the U.S. passed the GENIUS Act, a bill designed to regulate and bring more clarity to the stablecoin market. “You are seeing with the GENIUS Act coming through, and regulatory clarity, an explosion of demand for building on top of stablecoin infrastructure,” Harmse told CNBC. BVNK’s technology can be used by customers to pay suppliers, contractors or merchants in other countries. The company is looking to expand its customer base, including to digital-only banks or neobanks that may use stabelcoins for their core checking account, Harmse said. The co-founder declined to get into the specifics of the company’s work with Citi as it’s “too early to announce” but noted the Wall Street bank has been bolstering its cross-border payment services. “U.S. banks at the scale of Citi, because of the GENIUS Act, are putting their weight behind ... investing in leading businesses in the space to make sure they are at forefront of this technological shift in payments,” Harmse said. Citi signaled its step up into crypto this year. CEO Jane Fraser said in June that the company is considering issuing its own stablecoin and is interested in offering custodian services for crypto assets. BVNK has “dipped in and out of profitability” as the company has invested in growth, Harmse said, adding that the company is on track to be profitable next year. BVNK is also backed by Coinbase and Tiger Global. The startup is playing in a highly-competitive space with other newcomers like Alchemy Pay and TripleA and established players like Ripple trying to get a slice of the cross-border digital money pie. Wall Street welcomes crypto Citi isn’t alone in embracing digital assets when it comes to major U.S. banks and financial institutions. JPMorgan Chase launched its own stablecoin-like token called JPMD this year. The bank also made the decision this year to allow clients to buy bitcoin. Banks have been looking at how to use blockchain, a technology originally developed to underpin bitcoin, to lower the cost and speed up transactions of many kinds. Part of this involves “tokenization” which broadly means the idea of issuing a digital token that represents something such as a deposit. Bank of New York Mellon, for example, is exploring tokenized deposits. HSBC has already launched a tokenized deposit service. Citi Ventures' investment in BVNK, an enterprise stablecoin infrastructure firm, underscores escalating institutional interest in digital assets for payments. BVNK's valuation now exceeds $750 million, up from its last disclosed round, with profitability projected for the next year, reflecting strong growth momentum particularly in the U.S. market. This strategic move positions Citi (C) at the forefront of leveraging stablecoin technology for cross-border transactions. The investment aligns with a broader trend among major U.S. banks like JPMorgan (JPM) and HSBC, which are actively exploring blockchain and tokenization for enhanced transaction efficiency. The U.S. GENIUS Act is cited as a significant catalyst, providing regulatory clarity that fuels demand for stablecoin infrastructure. This regulatory environment is fostering an "explosion of demand" for building on stablecoin technology, validating its potential beyond speculative trading. Stablecoins, with an estimated $9 trillion in transactions over the past year and a total market cap exceeding $300 billion, are increasingly viewed as a key tool for low-cost, 24/7 cross-border payments. Citi's consideration of its own stablecoin and crypto custody services further indicates a strategic pivot towards integrating digital assets into core banking operations. While BVNK operates in a competitive landscape, its growth and backing by entities like Coinbase (COIN) highlight its position in this evolving sector.
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