Citigroup digital transformation has begun. Citigroup, which oversees $759 billion in client assets, has introduced a digital token service for institutions to facilitate swift and efficient cross-border money transfers and trade finance.
Today, Citi revealed the new service, noting that rather than using an already-existing blockchain like Bitcoin or Ethereum, it will use a proprietary corporate blockchain. The project will be known as Citi Token Services, and it is hoped that it will offer automated trade finance every day of the week, including holidays.
The announcement claimed that Citi Token Services will include tokenized deposits and smart contracts into Citi’s global network, boosting the company’s core trade finance and cash management capabilities. Institutional clients want always-on, programmable financial services, and Citi Token Services will offer automated trade finance, liquidity, and cross-border payment solutions.
Before launching the new Citigroup digital transformation, Citi partnered with logistics leader Maersk to create a digital version of bank guarantees and letters of credit, giving it confidence that instant payments and programmable transfers of tokenized deposits would be possible through smart contracts. In addition, a worldwide cash management experiment proved that Citi Token Services may provide instant liquidity transfers across Citi branches.
Most importantly, the blockchain initiative will not compete with permissionless or decentralised systems. While decentralisation is the primary value proposition for cryptocurrency initiatives such as Bitcoin, the responsibilities that come with it do not often appeal to institutional corporations. Citi is banking on clients’ demand for a trusted custodian and token manager with the imminent launch of its token service product.
The release further stated that Citi owns and manages the private/permissioned blockchain technology employed and that clients would not need to operate a blockchain node to access the services.