Citi launches cross-border payments 24/7 token service for institutional clients
The bank said that the service uses blockchain technology to convert clients’ deposits into digital tokens that can be used for instant cross-border payments 24/7.
The lender announced that Citi has launched a token service using blockchain technology to offer digital asset solutions for its institutional clients.
Citi's statement said that the new service, called Citi Token Services, will convert clients’ deposits into digital tokens that can be used for instant cross-border payments, liquidity and automated trade finance solutions around the clock. The service, part of the bank’s treasury and trade solutions, aims to integrate tokenised deposits into Citi’s global network to boost its core cash management and trade finance capabilities.
Shahmir Khaliq, Citi’s global head of services, said in a statement.
- “Digital asset technologies have the potential to upgrade the regulated financial system by applying new technologies to existing legal instruments and well-established regulatory frameworks,”
- “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.”
- The product debut aligns with Citi’s work on the regulated liability network to create interoperable digital asset solutions for multiple banks,
Citi’s blockchain technology is owned and managed by the bank. Citi said clients do not need to host a blockchain node to access the services.
Testing the technology
Citi has tested the service with the shipping giant Maersk and a canal authority.
The bank said that the digital process used in the pilot service provided instant payment capabilities to the buyers and sellers via smart contracts — a method meant to reduce transaction time from days to minutes. The digitised solution is designed to work similarly to bank guarantees and letters of credit in the trade finance ecosystem.
Citi Token Services has also been tested on a global cash management pilot to enable Citi’s clients to transfer liquidity between the lender’s branches around the clock.
Ryan Rugg, global head of digital assets within Citi’s treasury and trade solutions division, said in a statement.
- “Frictions related to cutoff times and gaps in the service window will be reduced,”
- “Our solutions within the Citi network are complemented by inclusive and open industry collaboration on initiatives like the regulated liability network.”
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