Citi Backs Stablecoin Firm BVNK Despite Previously Opposing Crypto Payment Rails

Core Insights - Citigroup has made a strategic investment in stablecoin infrastructure company BVNK through its venture capital arm, Citi Ventures, marking a significant shift from its previous warnings about the risks of deposit flight associated with yield-bearing stablecoins [1][5] Company Overview - BVNK operates a payments rail that facilitates global stablecoin transactions, enabling customers to transfer funds between fiat and cryptocurrency [1] - The company is backed by notable investors including Coinbase and Tiger Global, and competes in a crowded market with both new entrants like Alchemy Pay and TripleA, as well as established players like Ripple [3] Market Dynamics - The U.S. market has been BVNK's fastest-growing segment over the past 12 to 18 months, driven by the passage of the GENIUS Act, which has provided regulatory clarity for the stablecoin market [3][4] - The GENIUS Act is viewed as creating a more favorable environment for stablecoin operations, although it has also prompted concerns from traditional banking groups about potential deposit outflows [4][6] Investment Context - The specific amount of Citigroup's investment in BVNK has not been disclosed, but the company's valuation is confirmed to exceed $750 million, as stated in its last funding round [2] - Citigroup's CEO has indicated plans to explore issuing its own stablecoin and developing custodian services for crypto assets, aiming to modernize the bank's infrastructure to safely deliver advancements in stablecoin and digital assets to clients [4]