Citigroup Backs Stablecoin Firm BVNK in Major Crypto Infrastructure Push

• Citigroup invests in London-based stablecoin firm BVNK, now valued over $750 million.

• US GENIUS Act boosts institutional confidence in stablecoins, driving BVNK’s US growth.

Citigroup has expanded its digital asset footprint through an investment in BVNK, which reflects the rapid popularity of blockchain payment technology on Wall Street. The bank’s investing unit funded the London-based stablecoin infrastructure company, which now has a value of over $750 million from its most recent rounds of funding.

As regulatory clarity increases and users adopt stablecoin-based technologies in more traditional payment systems, traditional financial institutions are more frequently investing in stablecoin technologies.

Wall Street Embraces Digital Payment Rails

Chris Harmse, co-founder of BVNK, shared that demand for stablecoin infrastructure has soared, especially following US regulatory news, which improved institutional confidence in stablecoins. The GENIUS Act outlined a path for US stablecoin oversight that would instil confidence in major banks to invest heavily into institutions offering blockchain-powered payment solutions to stay competitive in the future. 

Harmse said America has been BVNK’s fastest-growing market for 18 months on the back of improving regulatory clarity and enterprise use of digital assets. Previously, Citigroup CEO Jane Fraser indicated that the bank may shortly launch its own stablecoin and offer cryptocurrency custody services as soon as the end of the year. 

Based on analysts at the bank, they are predicting the stablecoin market may reach four trillion dollars in size by 2030, which is a marked increase from earlier conservative estimates. Visa, for its part, also recently invested in BVNK via its venture arm, following BVNK’s fifty-million-dollar Series B round from Haun Ventures.

At the same time, the Bank of England is under pressure to ease the proposed stablecoin holding limits, following a backlash from the industry and worries regarding ‘competitiveness’. The original regulations were to place limits on the size of individual and corporate holdings at £20,000 and £10 million, respectively, in order to reduce systemic risks. 

The move now being considered by British regulators is to allow exceptions in respect of cryptocurrency firms that would need larger reserves for their trading activities and to ensure they have appropriate liquidity buffers. This reconsideration is obvious, as even the regulators have come to believe that severe restrictions may end up putting UK financial firms at a competitive disadvantage with their US counterparts operating within digital finance.

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