Citigroup has introduced Citi Token Services, a private, permissioned blockchain that provides institutional clients with cross-border payment, liquidity, and automated trade finance solutions.
Citi Treasury and Trade Solutions (TTS), holding banking licenses in over 90 countries, has completed two service prototypes. It collaborated with the Danish shipping company Maersk and an unnamed canal authority to develop a program that made immediate payments to service providers using smart contracts, reducing transaction processing times from days to minutes.
The new services “will integrate tokenized deposits and smart contracts into Citi’s global network,” per an official statement.
According to the statement, the service replaces bank guarantees and letters of credit.
A second pilot enabled clients to transfer liquidity between Citi branches around the clock, reducing “frictions related to cut-off times and gaps in the service window,” according to Ryan Rugg, TTS’s global director of digital assets. He proceeded:
“Our solutions within the Citi network are complemented by inclusive and open industry collaboration on initiatives like the Regulated Liability Network.”
November 2022 saw the introduction of Regulated Liability Network (RLN) technology. Citi was among the major financial institutions participating in the Federal Reserve Bank of New York’s July-concluded proof-of-concept.
The RLN infrastructure combines assets and liabilities on a single ledger for atomic settlement. A handful of “unified ledger” proposals have arisen in recent months. The new Citi service utilizes deposit tokens, commercial bank currency tokenized.
Reportedly, JPMorgan is also investigating the use of deposit tokens. That technology was pioneered in Project Guardian, launched in May 2022 by the Monetary Authority of Singapore, in which JPMorgan participated.