Citigroup has launched the pilot of its Citi Token Services, a new platform aimed at strengthening cash management and trade finance mechanisms. The company announced in a press release that the service uses blockchain and smart contract technologies to provide innovative digital asset solutions for institutional clients.
Citi Token Services will integrate tokenized deposits and smart contracts into Citi’s global network in an effort to enhance its core cash management and trade finance capabilities. The services are designed to meet the need for ‘always-on’ programmable financial services and will provide 24-hour cross-border payments, liquidity and automated trade finance solutions.
Wider adoption is expected
The development of Citi Token Services is in line with Citigroup’s belief that more than a billion people will use blockchain technology over the next six to eight years, likely without knowing it. Citigroup had predicted that this mass adoption would be driven by central bank digital currencies (CBDCs) and tokenization.
Citi has been actively testing its token services with global trade leader Maersk and a channel authority to digitalize services similar to bank guarantees and letters of credit within the trade finance ecosystem. This included the programmable transfer of tokenized deposits, offering instant payments to service providers via smart contracts. Commenting on the successful test pilots, Marie-Laure Martin, Regional Treasury Manager for the Americas at Maersk, said: “The innovative solution has promising applications for trade finance.”
The tested technology is expected to provide both buyers and sellers with a fully digital process, enabling instant payments and potentially reducing transaction processing time from days to just minutes.
Additionally, the recently launched Citi Token Services are integrated into a global cash management pilot project designed to enable customers to transfer liquidity between different Citi branches 24/7. Ryan Rugg, Global Head of Digital Assets at Citi Treasury and Trade Solutions, highlighted that Citi Token Services could provide corporate treasurers with a new tool for managing global liquidity on a programmable basis.
The blockchain technology used in the service is private and permissioned, meaning it is owned and operated by Citi. As a result, customers do not need to host a blockchain node to access these services. Citigroup’s continued development of digital asset solutions aligns with its ambitions to improve products and services in digital money, trading, securities, custody, asset management and collateral mobility.