Citi to pilot private blockchain services for institutional clients
Published
JPMorgan is showing interest in similar solutions, but is still in the early exploration stage
By Matt BrienenCitiGroup has developed a permissioned blockchain for institutional customers to interact with digital assets.
The new product, called Citi Token Services, intends to provide clients access to tokenized deposits, cross-border payments and automated trade finance solutions 24 hours a day.
Citi’s head of global services Shahmir Khaliq said this development advances the goals of the Regulated Liability Network, a whitepaper published in November 2022 professing the desire to get the world’s financial system to a place where on-chain, 24/7 programmable, final settlement in sovereign currencies is possible.
“Digital asset technologies have the potential to upgrade the regulated financial system,” Khaliq 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.”
Maersk partnered with Citi Treasury and Trade Solutions (CTTS) for Citi’s digital asset trading service, which would serve the same purpose as “bank guarantees and letters of credit” in traditional finance, according to a press release.
Both companies reported that the pilot program was able to provide instantaneous payments to service providers via smart contracts, something that would be beneficial to companies with many vendors.
Ensuring liquidity for premier banking clients is also emphasized in this new product launch, highlighted by the inclusion of a cash management pilot.
“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,” CTTS global head of digital assets Ryan Rugg said in a statement.
It appears that Citi has beaten JPMorgan to this, as the largest bank in the US by assets is still in the “early stages” of exploring a similar private blockchain service, according to Bloomberg.
JPMorgan first showed interest in bank-issued deposit tokens, different from CBDCs or stablecoins, in February 2023.