Citigroup Unveils New Token Service That Transforms Deposits Into Digital Assets

Citigroup, the New York-based multinational investment bank and financial services corporation, unveiled the Citi Token Services this week—a new offering that transforms customers' deposits into digital tokens.

Managed by Citi Treasury and Trade Solutions (TTS), this latest service represents Citi's most recent digital asset solution, harnessing blockchain and smart contract technologies.

Currently available to institutional clients, the Citi Token Services seamlessly integrate smart contracts and tokenized deposits into the global network of this financial services giant, further enhancing its core cash management and trade finance capabilities.

"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. This development goes hand-in-hand with our industry leading work on the Regulated Liability Network to create interoperable digital asset solutions on a multi-bank basis," Citi's global head of services Shahmir Khaliq said in a press release.

Furthermore, Citi Token Services offers round-the-clock cross-border payments, automated trade finance solutions, and liquidity to its institutional clients.

This offering marks Citi's latest endeavor to provide tokenized deposits to its clients. Tokenized deposits refer to deposits backed by real-world assets such as fiat currency or any other valuable asset held by an institution. These deposits are processed on blockchain rails, ensuring instantaneous settlement.

For this specific offering, Citigroup relies on its private or permissioned blockchain, eliminating the need for clients to host a blockchain node to set up their digital wallets. They can access the company's Citi Token Services through their existing systems.

"Citi Token Services provides corporate treasurers with a new tool to manage global liquidity on a just-in-time, programmable basis. Frictions related to cut off 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. 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," Citi TTS global head of digital Assets Ryan Rugg said.

Citi's latest offering has outpaced other major banks in their efforts to launch similar services, including JP Morgan, which is still in the early stages of its initiative, according to Bloomberg.

The Citi Token Services aim to address the challenge of moving funds across borders, a process that typically takes days due to various factors, including differing work hours, bank holidays, and the diverse systems employed by banks and governments.