Citigroup confirmed in a Monday, September 18 press release developing the Citi Token Services to allow institutional clients to convert their deposits into digital tokens for easier transfer.
The product unveiled by the American investment banking giant is leveraging blockchain blend with smart contract technology to facilitate institutional clients expedite cross-border transfers. The Monday statement indicated that the new technology will utilize the private blockchain, not public-oriented platforms, including Ethereum and Bitcoin. It assured that the Citi Token Services features automate trade with the finance solutions round the clock.
Digital Asset Technologies Potential to Reinforce Traditional Financial System
The global executive of services, Shahmir Khaliq, added that digital asset technologies harbor the potential to reinforce the traditional financial system by offering tech-backed solutions to upgrade the existing instruments. The executive indicated that the upgrade is necessary to expand the scope of the existing legal instruments. Doing so mandates compliance with the well-established regulatory frameworks.
The idea to unveil the private blockchain services aligns with Citi’s strategic realignment in the overly competitive and dynamic financial ecosystem. The service targets to streamline the execution of big-money transactions. In particular, it targets digitizing the bank guarantees and credit letters that have gained popularity among institutional clients in trade finance.
Citi Integrates Maersk to Pilot Solution to Payment Collections in Shipping Industry
The unveiling of the private blockchain-based services is made possible by integrating Maersk logistics company in the pilot product. The Monday statement indicated it would utilize the shipping industry, which has often posed challenges for banks. Citi’s executive Khaliq admitted that the service would ease payment collections and transaction processing that have proved complex and cumbersome for banks.
Citi indicated that the private blockchain technology, though in the pilot phase, is projected to lower the time taken to process transactions from days to a few minutes. Maersk treasury manager in the American region Marie-Laure Martin expressed optimism about the collaboration with Citi. He confessed that the successful test pilots would offer meaningful ground to scale the guarantee solution of leveraging smart contracts and digitized tokens.
Cit Piloting on Blockchain and Smart Contracts Services to Institutional Clients
A review of Citi’s activity in blockchain technology shows that Citi Token Services has been in use. Its application targeted the global cash management pilot to allow institutional clients to have round-the-clock capability to transfer liquidity among the Citi branches.
A March report by Citi illustrated that the digital asset world is edging closer to the inflection point. Its accomplishment will leave crypto adoption primarily a process dominated by central bank digital currencies (CBDCs) and tokenizing real-world assets.
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