Citi Introduces Citi Token Services for Instant Global Deposits
Citi has announced the launch of Citi Token Services, a new offering that allows client deposits to be tokenized and sent anywhere in the world instantly. This move comes as part of Citi’s ongoing exploration of blockchain and digital assets. The service utilizes blockchain technology and smart contracts to provide digital asset solutions for institutional clients. By integrating tokenized services and smart contracts into its global network, Citi aims to enhance trade finance and cash management capabilities. The service will offer cross-border payment liquidity and automated trade finance solutions on a 24/7 basis, meeting the demand for always-on programmable financial services from institutional clients.
Enhancing Trade Processes with Smart Contracts
Citi plans to automate trade processes using smart contracts. In collaboration with Maersk and a canal authority, the bank has already digitized a solution that serves as an alternative to bank guarantees and letters of credit. Through successful pilot tests, tokenized deposit transfers were demonstrated, allowing instant payments to service providers via smart contracts. The solution has promising applications in trade finance. In addition, Citi Token Services has been applied in a global cash management pilot, enabling clients to transfer liquidity between branches at any time.
Financial Institutions Embrace Blockchain
Citi’s entry into digital assets positions it as one of the major financial institutions venturing into this space. Other players, such as Hamilton Lane, KKR, Franklin Templeton, and JPMorgan Chase, have also embraced blockchain technology for various purposes. Bernstein predicts that around $5 trillion worth of real-world financial assets will be tokenized on the blockchain within the next five years. While Citi currently uses a private blockchain for its services, it remains open to utilizing public blockchains if regulations allow.
Hot Take: Citi Pioneers Real-Time Global Transaction Banking
Citi’s launch of Citi Token Services signifies a significant step towards real-time, always-on transaction banking services for institutional clients. By leveraging blockchain technology and smart contracts, Citi aims to provide instant cross-border payment liquidity and automated trade finance solutions. This move aligns with the growing trend of financial institutions exploring digital assets and blockchain technology to enhance their services. With the potential to revolutionize the regulated financial system, Citi’s introduction of tokenized deposits opens up new possibilities for global liquidity management and trade processes.
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