Citi backs stablecoin firm as big banks warm to crypto
BVNK co-founders (from left) Donald Jackson, Jesse Hemson-Struthers and Chris Harmes at the company’s San Francisco Office.
BVNK
Citi invests in stablecoin infrastructure company BVNKMajor US banks are increasing their presence in the cryptocurrency and digital asset space, the startup told CNBC on Thursday.
Stablecoins are a type of digital asset pegged to fiat currency and backed by real-world assets such as bonds. The two biggest are USDC and Tether, which issue USDT.
BVNK’s core technology is an efficient payment channel that facilitates stablecoin transactions globally and allows customers to move money from fiat to cryptocurrency and back.
The company declined to disclose the amount of Citi’s deposit or its current value. But BVNK co-founder Chris Harmse told CNBC in an interview that the valuation is higher than the $750 million publicly disclosed in the last funding round.
The investment was made by venture capital arm Citi Ventures. citigroup.
Stablecoins were once just a means for people to quickly move in and out of other cryptocurrencies. bitcoinIt is now seen as a potential key tool for cross-border transactions due to its speed of sending and receiving, low cost and 24/7 payment.
Approximately 9 trillion dollars worth of stablecoin transactions have been carried out in the last 12 months. VisaAccording to Coinmarketcap data, the current valuation of all existing stablecoins stands at over $300 billion.
US growth
BVNK’s Harmse said the company is seeing momentum thanks to what he sees as a more favorable regulatory environment for the crypto industry, especially in the US, which has been its fastest-growing market over the past 12-18 months.
Earlier this year, the US The GENIUS Act is a bill designed to regulate the stablecoin market and provide greater clarity.
“With the passage of the GENIUS Act and the regulatory clarity, you are seeing an explosion in demand to build on stablecoin infrastructure,” Harmse told CNBC.
BVNK’s technology can be used by customers to pay suppliers, contractors or merchants in other countries. Harmse said the company is considering expanding its customer base, including digital-only banks or neobanks that may use stabelcoin for basic checking accounts.
The co-founder declined to go into details of the company’s work with Citi because it was “too early to make an announcement,” but noted that the Wall Street bank supports cross-border payment services.
“U.S. banks on the scale of Citi are punching above their weight because of the GENIUS Act… they are investing in leading businesses in the space to ensure they are at the forefront of this technological shift in payments,” Harmse said.
Citi signaled that it will step into crypto this year. CEO Jane Fraser said in June that the company was considering launching its own stablecoin and was interested in offering custody services for crypto assets.
Harmse said BVNK’s “profitability has been in and out” as the company invests in growth, adding that the company is on track to be profitable next year. BVNK is also supported by: coinbase and Tiger Global.
The startup is playing in a highly competitive field, with other newcomers like Alchemy Pay and TripleA and established players like Ripple trying to grab a slice of the cross-border digital currency pie.
Wall Street welcomes crypto
Citi is not alone in embracing digital assets when it comes to major US banks and financial institutions.
Banks are exploring how to use blockchain, a technology originally developed to power Bitcoin, to reduce cost and speed up many transactions. Part of this involves “tokenization,” which generally refers to the idea of issuing a digital token that represents something like a deposit.
Bank of New York MellonFor example, it is exploring tokenized deposits. HSBC has already launched a tokenized deposit service.
