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Citigroup Announces Piloting of Citi Token Services to Enhance Cross-Border Payments

UTC by Steve Muchoki · 3 min read
Citigroup Announces Piloting of Citi Token Services to Enhance Cross-Border Payments
Photo: Shutterstock

Through the use of blockchain technology, Citigroup anticipates reducing cross-border timelines from days to instantaneous.

Citigroup Inc (NYSE: C) announced the creation and piloting of Citi Token Services, a blockchain and smart contract-enabled technology meant to deliver digital asset solutions to institutional clients. Notably, Citi Treasury and Trade Solutions (TTS) closely worked together to enable tokenized deposits and smart contracts into the company’s global financial network. By upgrading the core cash management system, Citigroup officials are confident that institutional clients will be satisfied with the seamless money transfer.

Following the announcement on Monday, Citigroup shares gained slightly in the after-hours to trade around $42.69, hence cementing the gains in the past five days. Moreover, Citigroup shares are currently retesting a crucial support zone that could guarantee a bullish rebound in the coming months, especially with such progressive announcements.

Closer Look at Citigroup and Its Tokenization Technology

According to the announcement, Citi Token Services will provide cross-border clients with a 24/7 liquidity solution and automated trades. To ensure seamless infrastructure, Citigroup worked closely with Maersk and Canal Authority. The high demand for reliable fast payments has seen traditional banking institutions transition to blockchain technology in a bid to remain competitive and relevant in the market.

“We are pleased to have collaborated with Citi in the successful test pilots for the guarantee solution using digitized tokens and smart contracts. The innovative solution has promising applications for trade finance,” Marie-Laure Martin, Regional Treasury Manager for the Americas at Maersk, noted.

The Citi Token Services were used by both buyers and sellers to facilitate instantaneous transactions that are protected by reliable smart contracts. According to Ryan Rugg, Global Head of Digital Assets at Citi Treasury and Trade Solutions, Citi Token Services will significantly reduce payment frictions and cut down on time.

“… Our solutions within the Citi network are complemented by inclusive and open industry collaboration on initiatives like the Regulated Liability Network. We are excited about both the potential for shared ledger technology to update Citi services, and the broader financial system in partnership with regulators and industry peers,” Rugg added.

Notably, the Citi Token Services will be running on a private blockchain thus clients will not be required to operate a node like the case of Bitcoin. As a result, Citi will be in a position to manage the digital platform through frequent updates without the complications of bringing together node operators. Moreover, Citigroup has banking licenses to operate in more than 90 countries around the world.

The mainstream adoption of blockchain technology has significantly helped in the tokenization of real-world assets. As a result, financial services that were previously locked to few investors are now accessible to global markets through blockchain technology. Furthermore, more clear regulatory frameworks have entered the blockchain space in the past few years to enable safe adoption.

Blockchain News, Cryptocurrency News, News
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