Citi has invested in stablecoin infrastructure company BVNK, the startup told CNBC on Thursday, as big U.S. banks ramp up their presence in the cryptocurrency and digital asset space.
Stablecoins are a type of digital asset pegged to a fiat currency and backed by real-world assets like bonds. The two biggest are USDC and Tether, which issues USDT.
BVNK's core technology is effectively a payments rail to facilitate transactions in stablecoins globally, allowing customers to move money from fiat into the cryptocurrency and back.
The company declined to disclose the sum that Citi invested or its current valuation. But Chris Harmse, co-founder of BVNK, told CNBC in an interview that its valuation is higher than the $750 million that was publicly disclosed at its last funding round.
The investment was made by Citi Ventures, the venture capital arm of Citigroup .
Stablecoins, once just a tool for people to trade quickly in and out of other cryptocurrencies like bitcoin , are now being seen as a potential key tool for cross-border transactions due to the speed to send and receive them, the low cost and 24/7 settlement.
There were nearly $9 trillion worth of stablecoin transactions over the last 12 months, according to Visa, while the current valuation of all stablecoins in existence stands at over $300 billion, Coinmarketcap data shows.