Yesterday Citi Securities Services announced it went live on the HKEX Synapse smart contract platform to settle securities between Hong Kong and China. Separately, Versana said Citi went live on its smart contract solution for syndicated loans.
Last week we reported that Hong Kong Exchanges and Clearing (HKEX) was about to go live with its Synapse smart contract solution for post trade processes for Northbound Connect. The latter is the HKEX conduit enabling Hong Kong and international investors to sette stock trades on China’s mainland Shanghai Stock Exchange. Stock settlement involves numerous intermediaries. Synapse lets them all share data simultaneously rather than processing transactions through each sequentially.
Citi has worked with HKEX since the 2019 pilots and is one of the first live Synapse participants. The bank is the world’s fourth largest global custodian, with $27.8 trillion in assets under custody. It’s also the first bank to fully integrate its custody solution with Synapse.
ChinaAMC(HK) was involved in the initial transaction on Citi’s Synapse offering.
“We are delighted to be among the first group of asset managers to pilot the HKEX Synapse platform. This marks another significant win in optimizing the two-way flow of capital between Hong Kong and the Mainland,” said Tian Gan, CEO of ChinaAMC (HK). “As a leading Chinese fund management company in Hong Kong, we are working diligently with our partners such as Citi as our custodian, to prepare for this rollout, as we connect China and the world.”
A separate division of Citi is involved in the other smart contract platform, Versana.
Versana syndicated lending
On Friday we reported that syndicated lending platform Versana had surpassed $900 billion worth of loans. It was co-founded by Bank of America, Citi, Credit Suisse and J.P. Morgan to help digitize the syndicated lending process. Citi is the last founder agent bank to go live on the platform.
“Citi has been committed to the Versana platform from the very beginning as we recognized that real-time information sharing is critical for the growth of the syndicated loan market,” said Michael Hershkowitz, COO of Wholesale Lending for Citi’s institutional businesses.
In March Versana closed a $40 million funding round, including new investors Deutsche Bank, Morgan Stanley, U.S. Bancorp and Wells Fargo. Apart from U.S. Bancorp, the others are major syndicated loan agents and will onboard onto Versana in the coming months.
Both HKEX Synapse and Versana use Digital Asset’s DAML smart contracts. Digital Asset was also one of the providers involved in the U.S. Regulated Liability Network (RLN) trials for interbank payments. While the RLN is an industy collaboration, Citi was the founder. Additionally, Citi recently launched Citi Token Services, which supports money movements between Citi’s global branches around the clock using tokenized deposits.