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Citigroup private blockchain for sending money. Citigroup, one of the world’s largest financial institutions, will launch Citi Token Services, a digital token service with blockchain technology and Smart Contracts for institutional clients. The product allows the financial corporation’s large clients to send money anywhere globally.

Citigroup uses a private one instead of doing so on a public blockchain, such as Bitcoin. The entity says Citi Token Services will provide cross-border payments, liquidity, and automated 24/7 trade finance solutions. The company touts its new service as a real-time payment revolution.

Citigroup blockchain

Citi Tokens Services will transform clients’ fiat money deposits into digital tokens that users can send to any recipient worldwide. The company’s treasury and trading division will oversee the digital asset. Shahmir Khaliq, global head of services at Citigroup, said digital asset technologies can improve the regulated financial system.

Testing logistics with Maersk

With this solution, Citigroup seeks to streamline large transactions by digitizing bank guarantees and letters of credit in the trade finance sector. Proof of this is the pilot plan between the financial institution and the logistics company Maersk. The program demonstrated the programmable transfer of tokenized deposits transformed into instant payments to service providers through Smart Contracts.

The shipping industry is often challenging for banks, as collecting payments and processing transactions in this sector is often cumbersome. According to Citigroup, digital token technology and Smart Contracts can reduce transaction times from days to minutes.

Programmable liquidity

Citi Token Services was also implemented in a global cash management pilot program, allowing clients to transfer liquidity between Citi branches worldwide in real-time and without interruption. The financial institution sees this solution as providing corporate treasurers with a programmable global liquidity management tool.

Citigroup members will not need to set up a digital wallet to use the new functionality. The service will be available through Citibank’s existing system. They’ll also integrate Citi Token Services into a global cash management project.

A report from Citigroup last March indicates that the world of cryptocurrencies is approaching an “inflection point.” In that report, the financial institution predicted that crypto adoption will adapt to the increased use of central bank digital currencies (CBDCs) and real-time asset tokenization.

Partnership with BondbloX Bond Exchange

It’s one of the company’s efforts within the digital asset sector. The announcement comes after Citi partnered with BondbloX Bond Exchange (BBX) to become its official digital custodian. In a statement Friday, the bank said the alliance will encompass custodial services and a pilot program for tokenized deposits.

The Monetary Authority of Singapore regulates BBX, described as the world’s first fractional bond exchange using atomic settlement and blockchain technology. The partnership provides eligible Citi clients access to BBX fractional bond trading, while the investment bank offers settlement and custody services. Launched in 2020, BBX facilitates bond investing by enabling investors to trade $1,000 fractions of traditional wholesale bonds through Blockchain technology. Traditionally, it takes about 48 hours to settle bond trades. However, using Smart Contracts for automated clearing and settlement and digital signatures guarantees automatic settlement.

“This partnership will enable Citi clients and others to enjoy all the benefits of bond trading, along with the support of Citi’s securities services, almost immediately.”

Rahul Banerjee, co-founder and CEO of BondbloX

Banks continue to enter the cryptocurrency ecosystem

With Citi launching this service, critical banking and financial institutions fully join the Bitcoin and cryptocurrency ecosystem and its inherent technology. And since 2021, the company has been sympathetic to the emerging market. Citi, created in 1892 in New York, United States, was developed in June 2021 as its particular unit to offer bitcoin and cryptocurrency services. That was its first step in the incursion into the cryptoassets market.

Since then, this financial company has moved closer to the Bitcoin ecosystem, joining other large banks that decided to become part of the emerging cryptocurrency market. In the United States, apart from Citi, several institutions such as BNY Mellon, JP Morgan, Goldman Sachs, and U.S. Bank, among other banks, entered the Bitcoin ecosystem several months ago. Many of these are through the offering of services, such as custody.

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