- Citigroup announces the launch of a token service for institutional clients.
- The tokenized service will be used on a private blockchain.
Citigroup Unveils Its Tokenized Service Platform
Citigroup, a U.S. banking giant, has launched a tokenization system, Citi Token Service, to upgrade cash management and trade finance for its institutional clients.
According to the bank, Citi Token Service uses blockchain and smart contract technologies to provide digital asset solutions to its institutional clients.
The tokenized service will be managed on a private blockchain and hosted by Citi without needing blockchain nodes.
The tokenized service will integrate tokenized deposits and smart contracts into Citi’s networks to upgrade the bank’s cash management capabilities.
“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,” the bank said.
In a pilot, Citi Token Service partnered with a global shipping business, Maersk, and a canal authority to create an efficient digital solution that serves the same purpose as bank guarantees and letters of credit in the trade finance industry.
The pilot portrayed Citi Token Service as a more secure and faster payment option compared to the lengthy payment process.
“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,” said Marie-Laure Martin, The Regional Treasury Manager for the Americas at Maersk.
The pilot results demonstrated how digitized solutions can move trade and finance forward by achieving successful transfers within minutes instead of days.
Citi Token Service has also been applied to a global cash management pilot, the bank stated in the press release. The bank assured clients that they could transfer liquidity between Citi branches at all times.
Ryan Rugg, Head of Digital Assets at Citi Treasury and Trade Solutions, emphasized how Citi Token Services can be an instrumental tool in managing global liquidity on a programmable basis.
According to him, “Frictions related to cut-off times and gaps in the service window will be reduced. Our solutions within the Citi network are complemented by inclusive and open industry collaboration on initiatives like the Regulated Liability Network. We are excited about both the potential for shared ledger technology to update Citi services and the broader financial system in partnership with regulators and industry peers.”
In March, the banking giant projected the market value of tokenized digital assets to be around $4 trillion to $5 trillion by 2030.
“Momentum on adoption has positively shifted as governments, large institutions, and corporations have moved from investigating the benefits of tokenization to trials and proofs of concept,” Citi said.
Citi Token Service can be deduced as the banking giant’s step towards its forecast in March. Citigroup’s launch of its tokenized service platform aligns with its ambitions of mass adoption and integration of blockchain technology in real-world use cases.
