Introducing Citi Token Services
Citigroup has announced the launch of Citi Token Services, a private blockchain platform that provides cross-border payments, liquidity, and trade finance solutions to institutional clients. According to a statement, the new platform will integrate tokenized deposits and smart contracts into Citi's global network.
Improved transaction processing
Citi Treasury and Trade Solutions (TTS), with banking licenses in over 90 countries, has successfully completed two pilot programs using the new service. In one pilot, Citi worked with Danish shipping company Maersk and an unnamed canal authority to make instant payments to service providers via smart contracts, significantly reducing transaction processing times from days to minutes. The service replaces the need for bank guarantees and letters of credit.
24/7 liquidity transfers
The second pilot enabled clients to transfer liquidity between Citi branches at any time of the day, eliminating the limitations imposed by cut-off times and gaps in the service window. Ryan Rugg, TTS global head of digital assets, highlighted the benefits of the new service, stating, "Our solutions within the Citi network are complemented by inclusive and open industry collaboration on initiatives like the Regulated Liability Network."
Regulated Liability Network (RLN)
The technology behind the new service, the Regulated Liability Network (RLN), was introduced in November 2022. Citi was one of the major financial institutions that participated in a proof-of-concept led by the Federal Reserve Bank of New York. RLN infrastructure places assets and liabilities on the same ledger to enable atomic settlement. This unified ledger approach is among several proposals that have emerged recently.
Deposit tokens gaining traction
JPMorgan is reportedly also exploring the use of deposit tokens, a technology that was pioneered in Project Guardian, launched by the Monetary Authority of Singapore in May 2022. The use of tokenized commercial bank money offers potential benefits for streamlined financial transactions.
*This article does not constitute financial advice. Please do your own research when considering investments or making financial decisions.