Citi Unveils Blockchain Powered Token Service
Citi has unveiled a new token service harnessing blockchain technology to provide digital asset solutions to its institutional clients. The bank made this announcement on Monday.
Citi Token Services: Revolutionizing Digital Asset Solutions
The newly introduced service, Citi Token Services, can convert clients’ deposits into digital tokens, which can be utilized for instant cross-border payments, liquidity management, and automated trade finance solutions.
This initiative is an integral part of the bank’s treasury and trade solutions, with the goal of seamlessly integrating tokenized deposits into Citi’s global network to enhance its core cash management and trade finance capabilities.
Digital Assets Transforming Finance
Shahmir Khaliq, Citi’s global head of services, emphasized the potential of digital asset technologies to modernize the regulated financial system by applying innovative technologies within established legal frameworks.
He noted that developing Citi Token Services is a significant step in delivering real-time, next-generation transaction banking services to institutional clients.
Driving Interoperable Solutions with Citi’s Token Services
According to Khaliq, Citi’s work on the regulated liability network aligns with the product launch, as it aims to create interoperable digital asset solutions that can benefit multiple banks.
Citi clarified that the bank owns and manages its blockchain technology, eliminating clients needing to host their blockchain nodes to access the services.
Successful Testing and Instant Payments
Citi has successfully tested this service with industry leaders such as Maersk and a canal authority. During these pilot tests, the digital process facilitated instant payments to buyers and sellers through smart contracts, reducing transaction times significantly.
The solution is designed to function similarly to traditional bank guarantees and letters of credit in the trade finance ecosystem.
Enhancing Global Cash Management
Citi Token Services has also undergone testing in a global cash management pilot program, enabling clients to transfer liquidity between the bank’s branches anytime, eliminating frictions related to cutoff times and service windows.
Ryan Rugg, global head of digital assets within Citi’s treasury and trade solutions division, highlighted the bank’s commitment to inclusive and open industry collaboration, particularly in initiatives like the regulated liability network.
Beyond Citi: The Wider Adoption of Blockchain in Banking
Citi is not alone in its adoption of blockchain technology for clients. Other financial institutions like JPMorgan Chase have also taken steps in this direction, operating their blockchain network, Onyx, and introducing a private stablecoin called JPM Coin.
Furthermore, pending regulatory approval, JPMorgan is exploring using a blockchain-based digital deposit token to expedite cross-border payments.
Read the original article on Banking Dive.
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