Key Points
- Citi has invested in London-based stablecoin infrastructure firm BVNK, backed by Coinbase and Tiger Global.
- Stablecoin transactions have reached nearly $9 trillion over the past year, with the total market cap of all stablecoins standing at $314 billion.
Citi, the third-largest bank in the United States, has strategically invested in BVNK. BVNK is a London-based stablecoin infrastructure firm supported by Coinbase and Tiger Global. This investment comes as US banks increasingly demand stablecoins due to clearer regulations.
BVNK operates a global payments platform that uses stablecoins. This platform allows for easy conversion between fiat and crypto. Chris Harmse, co-founder of BVNK, mentioned in a recent CNBC interview that the startup has experienced strong growth in the US over the past year.
Investment Details
The size of Citi’s investment in BVNK and the company’s current valuation have not been disclosed. However, Harmse confirmed that BVNK’s valuation has surpassed the $750 million mark from its previous funding round.
Citi has been expanding its cross-border payments capabilities. The bank is also targeting digital-only banks and neobanks that may integrate stablecoins into their core banking products. Interestingly, in July, Citi’s CEO Jane Fraser revealed that the bank is considering issuing its own Citi stablecoin.
Stablecoin Market Growth
Stablecoins have gained significant traction due to their speed, low cost, and 24/7 settlement capabilities. According to Visa data, stablecoin transactions reached nearly $9 trillion over the past 12 months.
Data by CoinMarketCap shows that the total market cap of all stablecoins currently stands at $314 billion. Tether’s USDT and Circle’s USDC lead the sector, valued at $178 billion and $75 billion, respectively.
JPMorgan predicts that demand could add another $1.4 trillion in dollar-based stablecoins by 2027 due to their expanding role in global finance. Standard Chartered notes that users are seeking safer, inflation-resistant digital alternatives. It estimates that stablecoins could draw around $1 trillion away from emerging-market banks within the next three years.
US Banks and Stablecoins
The growing adoption of stablecoins comes after the US passed the GENIUS Act, which provides regulatory clarity for stablecoins. The Trump family-backed WLFI launched its own stablecoin, USD1, earlier this year.
Citi joins a list of American financial giants exploring blockchain technology to modernize payments and settlements. Custodia Bank and Vantage Bank issued “Avit” tokens, tokenized US dollar demand deposits on Ethereum.
JPMorgan Chase has already launched its own blockchain-based payment token, JPMD. Bank of America is also preparing to launch a USD-backed stablecoin once regulations are finalized.
