Citi Lays Tracks for Stablecoin Era with BVNK Investment

Citigroup's venture capital arm, Citi Ventures, has invested in stablecoin infrastructure firm BVNK, signaling Wall Street's growing embrace of digital assets as the U.S. regulatory environment for stablecoins becomes more defined. BVNK's technology operates as a global payments rail, enabling seamless conversion between fiat currencies and stablecoins like USDC and USDT. The company declined to disclose the investment amount or valuation but noted its current valuation exceeds $750 million, up from its last publicly disclosed round. This move aligns with Citigroup's broader strategy to position itself at the forefront of the evolving stablecoin ecosystem, with CEO Jane Fraser previously indicating interest in issuing a stablecoin and offering custodian services for crypto assets.

The investment comes amid a surge in stablecoin adoption, driven by regulatory clarity from the GENIUS Act-a bipartisan U.S. law passed in July 2025 that establishes a federal framework for payment stablecoins. The legislation mandates 1:1 reserve backing for stablecoins using high-quality assets and clarifies oversight responsibilities, reducing uncertainty for issuers and users. BVNK co-founder Chris Harmse highlighted that the Act has catalyzed demand for stablecoin infrastructure, particularly in the U.S., where the company has seen its fastest growth over the past 18 months. Harmse emphasized that the Act's provisions have encouraged institutions to adopt stablecoins for cross-border transactions, citing their speed, low cost, and 24/7 settlement capabilities.

Stablecoin transactions have already reached nearly $9 trillion over the past 12 months, according to Visa, with total market capitalization exceeding $300 billion. BVNK's platform allows customers to pay suppliers, contractors, and merchants internationally, and the company is targeting expansion into digital-only banks and neobanks that may use stablecoins for core services. While specifics of Citi's collaboration with BVNK remain undisclosed, Harmse noted that Citi is bolstering its cross-border payment services, leveraging stablecoin infrastructure to compete with traditional rails.

The move reflects a broader trend among U.S. banks to integrate blockchain technology. JPMorgan Chase launched its stablecoin-like token, JPMD, in 2025, while Bank of New York Mellon and HSBC are experimenting with tokenized deposits. Citi's investment joins similar efforts by JPMorgan, BNY Mellon, and others to modernize payment systems. Meanwhile, Visa recently invested in BVNK through its venture arm, and the company has also secured backing from Coinbase and Tiger Global.

However, the stablecoin landscape remains competitive. Startups like Alchemy Pay and Ripple, alongside established players, are vying for market share in cross-border payments. Despite this, BVNK has maintained a strong position, with Harmse stating the firm is on track to achieve profitability in 2026 after periods of reinvesting growth. The company's partnerships, including a recent collaboration with LianLian Global to enable stablecoin-powered cross-border transactions, underscore its strategic focus on expanding access to digital asset rails.

The regulatory environment, while improving, remains a contentious issue. Citigroup analyst Ronit Ghose had previously warned of risks from yield-bearing stablecoins, drawing parallels to historical deposit flight from banks. However, the bank's investment in BVNK suggests a strategic pivot toward embracing stablecoin technology, even as it navigates these risks. This duality-caution and innovation-reflects the broader industry's balancing act between leveraging stablecoin efficiency and mitigating systemic risks.

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[1] Citi backs stablecoin firm BVNK as Wall Street warms to crypto (https://www.cnbc.com/2025/10/09/biti-bvnk-stablecoin-banks-crypto.html?msockid=35e0eef6febd6b7f27a9f876ffd96a8a)

[2] Citi Backs Stablecoin Firm BVNK Despite Previously Opposing ... (https://finance.yahoo.com/news/citi-backs-stablecoin-firm-bvnk-091142326.html)

[3] Citi Ventures Backs Stablecoin Firm BVNK As Wall Street (https://cointelegraph.com/news/citi-invests-in-bvnk-stablecoin-infrastructure-expansion)

[4] Citi backs stablecoin firm BVNK as Wall Street warms to crypto (https://www.cnbc.com/2025/10/09/biti-bvnk-stablecoin-banks-crypto.html?msockid=0a4209637cee6e5e3b0a1fe37d126fa5)

[5] BVNK, LianLian Team on Stablecoin-Powered X-Border Payments (https://www.pymnts.com/partnerships/2025/bvnk-lianlian-global-partner-stablecoin-powered-cross-border-payments/)

[6] The GENIUS Act: A Comprehensive Guide to US Stablecoin ... (https://www.paulhastings.com/insights/crypto-policy-tracker/the-genius-act-a-comprehensive-guide-to-us-stablecoin-regulation)