Capital markets News

Citi to custody for BondEvalue fractionalized blockchain bond platform

trading bonds

Today Singapore’s BondEvalue announced that Citi Securities Services is becoming a custodian for BondEvalue’s bond exchange BondbloX. Northern Trust is already a custodian and the solution launched last October after emerging from the Monetary Authority of Singapore’s sandbox.

It’s aim is to fractionalize bonds, making them more accessible to so-called HENRYs, high earners not rich yet. Rather than attracting bond issuers to the platform, it takes existing issues that are invariably high denomination, custodies them with Citi or Northern Trust, and then issues a fractional token, often as little as $1,000, which is tradeable. Another advantage is instant settlement, removing counterparty risk.

“BondEvalue’s decision to appoint Citi as a custodian is a recognition of our investment in areas such as blockchain and DLT as well our commitment to continuous innovation,” said Citi’s Chris Cox. “We look forward to working with BondEvalue along with Northern Trust to help develop this digital ecosystem.”

The platform uses the enterprise blockchain Hyperledger Sawtooth.

Meanwhile, there is plenty of competition around blockchain and bonds in Asia, although many of them focus on bond origination. One of the biggest is the SGX and Temasek digital assets joint venture, which last year issued a S$400 million ($301m) bond for agribusiness Olam.  

Another is the bond issuance platform co-created by Union Bank of the Philippines and Standard Chartered Ventures. In Malaysia, the main stock exchange owns Malaysia’s bond exchange and is running a trial with blockchain firm Hashstacs. In Japan, the Nomura and SBI backed BOOSTRY platform is initially focused on using blockchain for bonds.