Citi backs stablecoin firm BVNK as Wall Street warms to crypto

Citi Ventures has made a strategic investment in BVNK, a company focused on stablecoin infrastructure, as large U.S. banks enhance their engagement in the cryptocurrency sector. Stablecoins, digital assets linked to traditional currencies and supported by tangible assets like bonds, have gained significant traction. The prominent players in this space include USDC and Tether, known for issuing USDT. BVNK specializes in providing a payment platform that facilitates global stablecoin transactions, enabling users to convert fiat currency to cryptocurrency and vice versa. While the specific amount of Citi’s investment remains undisclosed, BVNK co-founder Chris Harmse revealed that the company’s valuation now exceeds the previously reported $750 million from its last funding round. This investment comes at a time when stablecoins are increasingly recognized for their potential in cross-border transactions, characterized by rapid transfers, low costs, and continuous availability. Recent data from Visa indicates that nearly $9 trillion worth of stablecoin transactions were processed in the past year, contributing to a total market valuation exceeding $300 billion, according to Coinmarketcap. Harmse noted a surge in BVNK’s growth, particularly in the U.S., attributed to a more favorable regulatory landscape following the passage of the GENIUS Act, which aims to provide clarity in the stablecoin market. He stated, "With the regulatory advancements like the GENIUS Act, we are witnessing a significant rise in demand for stablecoin infrastructure development." BVNK’s services allow customers to make payments to suppliers and merchants globally. The firm is actively seeking to broaden its customer base, targeting digital-only banks that may incorporate stablecoins into their banking services. Although Harmse refrained from disclosing specifics about the partnership with Citi, he acknowledged the bank's increased focus on cross-border payment solutions. Citi has been vocal about its commitment to the cryptocurrency space, with CEO Jane Fraser expressing interest in launching a proprietary stablecoin and expanding custodian services for digital assets. BVNK aims to achieve profitability next year after navigating a period of fluctuating financial performance due to growth investments. The startup is also supported by major investors like Coinbase and Tiger Global. As competition heats up in the digital currency arena, BVNK faces rivals including Alchemy Pay, TripleA, and established names like Ripple. Other major banks, such as JPMorgan Chase, are also stepping into this domain, having launched their own stablecoin-like token and enabling clients to purchase Bitcoin. These developments reflect a broader trend among financial institutions exploring blockchain technology to enhance transaction efficiency and reduce costs.