Citigroup Inc. is entering the #cryptocurrency market with a blockchain-based digital token business.
Before settling through central bank reserves on distributed ledger, banks will let issue of digital money reflecting consumers' personal monies.
Customers will have round-the-clock electronic access to moving funds across Citi branches. There is no need for a digital wallet.
In order to improve its cash management and trade finance (TradeFi), Citibank has introduced a new product called Citi Token Services under the Citi Treasury and Trade Solutions (TTS) division. In order to provide digital asset solutions for its institutional clients, the feature relies on blockchain technology and smart contract technologies.
The Citibank digital token, Citi Token, will be released.
Tokenized deposits and smart contracts are now part of Citigroup Inc.'s worldwide banking network thanks to a new feature called Citi Token Services. An official statement said that the change was made to "upgrade basic cash management and TradeFi capabilities" as part of the company's overall expansion plan.
The product is designed to meet the needs of large businesses by providing an always-on financial service that facilitates international payments, liquidity, and automated TradeFi solutions. The company's treasury and trade solutions division will be in charge of the initiative, which will convert client deposits into digital tokens for instantaneous global transfer.
According to Shamir Khaliq, global head of services at the conglomerate,
...this innovation complements our market-leading efforts on the Regulated Liabilities Network to offer multi-bank interoperable digital asset solutions.
This development provides a novel idea, yet it is debatable whether permissioned blockchains will permanently alter the financial landscape worldwide.
The Federal Reserve and #Citibank are conducting trials on a supervised liability network.
To "digitise a solution that performs the same role as bank guarantees and letters of credit in the trade finance ecosystem," Citigroup Inc., Maersk, and the Federal Reserve are participating in a joint test pilot that has tremendous promise for the TradeFi industry.
The network would allow the banking system at Citigroup to issue digital currency in place of consumer dollars. Central bank reserves might be used to settle the credit so issued on a distributed ledger at a later time. That's why its success would show the Fed that digital money can enhance wholesale payments.
Members may use their regular Citibank accounts to store and utilise their Citi Tokens, eliminating the need for a separate digital wallet.
The Fed is finally starting to cool down on crypto
Experts in the market, such as Ripple Lawyer John E. Deaton, have noticed the Fed's engagement as a canal authority and have criticised it for being hypocritical in its embrace of the technology after previously opposing it.
Nonetheless, the fact that conventional financial institutions are adopting digital assets to enhance efficiency and customer experience is evidenced by the widespread use of Citi Tokens for immediate worldwide transactions.
Citigroup, which has a digital custody agreement with Ripple's Metaco, recently debated whether to continue the collaboration.
A year following Citigroup's partnership with Metaco, in May 2023, #Ripple purchased the Swiss financial technology startup for $250 million.
