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Citi Unveils Digital Asset Features to Institutional Clients

Introducing Citi Token Services: Revolutionize Your Transactions

Citi Group, a prominent investment banking corporation, has officially introduced a new digital token service tailored for institutional use.

Dubbed as Citi Token Services, this innovative product utilizes blockchain technology and smart contracts to streamline cross-border money transfers for institutional clients. In contrast to public blockchains like Bitcoin or Ethereum, Citi’s system will utilize a private blockchain.

Additionally, Citi emphasized that the Citi Token Services platform will provide automated trade finance solutions 24/7, around the clock.

“If you’re a large multinational client with multiple bank accounts across different regions, holding buffers of cash inefficiently, this is really an inefficient use of cash,” explained Ryan Rugg, the global head of digital assets within Citi’s Treasury and Trade Solutions business. With this new service, Rugg added, “if it’s 5:00 p.m. in the U.S. and 5:00 a.m. in Singapore, but you need to get money there, you can send that immediately, within seconds.”

The bank is also incorporating smart contracts to automate the trade process. Smart contracts are self-executing programs that run automatically when the conditions of an agreement or contract are met.

Shahmir Khaliq, Citi’s global head of services, emphasized that “digital asset technologies have the potential to upgrade the regulated financial system by applying new technologies to existing legal instruments and well-established regulatory frameworks.”

Citi’s goal is to simplify substantial transactions by digitizing bank guarantees and letters of credit within the trade finance ecosystem.

The bank collaborated with Maersk, an integrated logistics firm, to conduct a pilot study, aiming to assess the feasibility of applying this solution in the shipping industry, known for its complexities in payment collection and transaction processing.

Citi stated that the technology used in the pilot project is expected to significantly reduce transaction processing times, potentially transforming them from days to mere minutes.

Marie-Laure Martin, the regional treasury manager for the Americas at Maersk, expressed satisfaction, stating “We are pleased to have collaborated with Citi in the successful test pilots for the guarantee solution using digitized tokens and smart contracts.”

In addition, Citi Token Services has been applied in a global cash management pilot program, enabling institutional clients to transfer funds between different Citi branches continuously, 24/7.

A March report from Citi highlighted that the digital asset landscape was nearing a crucial turning point and predicted that the adoption of cryptocurrencies would be predominantly driven by the emergence of central bank digital currencies (CBDCs) and the tokenization of tangible assets in the real world.

Citi’s announcement stands out as one of the most notable developments among financial institutions exploring the realm of digital assets. For instance, investment manager Hamilton Lane has introduced three funds that utilize tokenization. Similarly, KKR has taken steps to tokenize a segment of an equity fund in collaboration with Securitize. Franklin Templeton, on the other hand, has rolled out a mutual fund designed to settle transactions and record ownership data across various blockchain networks. Moreover, JPMorgan Chase has unveiled its bank-driven blockchain platform named Onyx, primarily geared toward international trade.

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