Citigroup, one of the largest financial institutions in the world, has launched Citi Token Services, a private blockchain platform designed for institutional clients. This new service will provide cross-border payment solutions, liquidity services, and automated trade finance solutions. According to a statement from Citigroup, the platform will integrate tokenized deposits and smart contracts into their global network.
Citi Treasury and Trade Solutions (TTS) has already conducted two successful pilots of the service. One pilot involved collaborating with Danish shipping company Maersk and a canal authority to make instant payments to service providers using smart contracts. This eliminated the need for traditional banking guarantees and letters of credit and reduced transaction processing times from days to minutes.
The second pilot allowed clients to transfer liquidity between Citi branches around the clock, eliminating issues related to cut-off times and service window gaps. Ryan Rugg, the Global Head of Digital Assets at TTS, emphasized the importance of collaboration within the industry, stating, “Our solutions within the Citi network are complemented by inclusive and open industry collaboration on initiatives like the Regulated Liability Network.”
The Regulated Liability Network (RLN) technology, introduced in November 2022, played a significant role in the development of Citi Token Services. Citi participated in a proof-of-concept led by the Federal Reserve Bank of New York, exploring the potential of RLN technology for cross-border transactions.
The RLN infrastructure enables atomic settlement by placing assets and liabilities on the same ledger. This unified ledger approach has gained attention in recent months as a proposal for cross-border tokenized asset transactions. The new Citi service utilizes deposit tokens, which are tokenized commercial bank money.
It’s worth noting that JPMorgan, another major financial institution, is reportedly exploring the use of deposit tokens as well. This technology was initially developed in Project Guardian, launched in May 2022 by the Monetary Authority of Singapore, in which JPMorgan participated.
As financial institutions continue to embrace blockchain technology and explore the potential of tokenization, the banking landscape is rapidly changing. These advancements in digital assets and blockchain solutions could revolutionize the way financial services are conducted globally, offering increased efficiency, security, and transparency.
– Citigroup Introduces Citi Token Services for Institutional Clients
– Regulated Liability Network Whitepaper
– JPMorgan Explores Use of Deposit Tokens
– Singapore’s Project Guardian for Digital Asset Tokenization
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