Quick take:
- Citigroup has launched a permissionless blockchain service for institutional clients.
- The new offering allows banks to turn customer deposits into digital tokens.
- The product focuses on trade finance and cash management services.
Citigroup is doubling down on its crypto strategy with a private token service for institutional clients. The global banking and investment services company on Monday announced new digital assets capabilities, integrating tokenised deposits into its global network.
According to the announcement, the new offering will focus on trade finance and cash management. It will enable banks in the network to turn customer deposits into tokens.
The company has already made significant strides in the crypto space through Citi Ventures, its investment arm, which counts TRM Labs and crypto trading technology company Talos among its portfolio companies.
“Institutional clients have a need for ‘always-on’, programmable financial services and Citi Token Services will provide cross-border payments, liquidity, and automated trade finance solutions on a 24/7 basis,” Citi said in a statement.
Commenting on the announcement, Shahmir Khaliq, the Global Head of Services at Citi said: “The development of Citi Token Services is part of our journey to deliver real-time, always-on, next-generation transaction banking services to our institutional clients. This development goes hand-in-hand with our industry-leading work on the Regulated Liability Network to create interoperable digital asset solutions on a multi-bank basis.”
The company is leveraging blockchain technology and smart contracts to allow multinational companies like Maersk to digitize a solution that serves the same purpose as bank guarantees and letters of credit in the trade finance ecosystem.
The company has already demonstrated the effectiveness of the system via a pilot through a transfer of tokenised deposits that provided instant payments to service providers via smart contracts.
Marie-Laure Martin, Regional Treasury Manager for the Americas at Maersk, said: “We are pleased to have collaborated with Citi in the successful test pilots for the guarantee solution using digitized tokens and smart contracts. The innovative solution has promising applications for trade finance.”
On the other hand, the Citi Token Services for cash allows clients to transfer liquidity between Citi branches on a 24/7 basis.
Ryan Rugg, Global Head of Digital Assets at Citi Treasury and Trade Solutions commented: “Citi Token Services provides corporate treasurers with a new tool to manage global liquidity on a just-in-time, programmable basis. Frictions related to cut-off times and gaps in the service window will be reduced.”
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