Monday, 22 April 2024

Citi develops new digital asset capabilities for institutional clients

5 min read

Citi Treasury and Trade Solutions (TTS) announces the creation and piloting of Citi token services for cash management and trade finance. The service uses blockchain and smart contract technologies to deliver digital asset solutions for institutional clients.

Citi token services will integrate tokenised deposits and smart contracts into Citi’s global network, upgrading core cash management and trade finance capabilities. Institutional clients have a need for ‘always-on’, programmable financial services and Citi token services will provide cross-border payments, liquidity, and automated trade finance solutions on a 24/7 basis.

Shahmir Khaliq, global head of services, at Citi, said: “Digital asset technologies have the potential to upgrade the regulated financial system by applying new technologies to existing legal instruments and well-established regulatory frameworks. 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 token services for trade
Citi worked with Maersk and a canal authority to digitise a solution that serves the same purpose as bank guarantees and letters of credit in the trade finance ecosystem. The pilot demonstrated programmable transfer of tokenised deposits that provided instant payments to service providers via smart contracts.

Marie-Laure Martin, regional treasury manager for the Americas at Maersk, said: “We are pleased to have collaborated with Citi in the successful test pilots for the guarantee solution using digitised tokens and smart contracts. The innovative solution has promising applications for trade finance”.

The technology used in the pilot provided a completely digital process to both buyers and sellers with instant payment capabilities, which is expected to reduce transaction processing times from days to minutes.

Citi token services for cash
Citi Token Services has also been applied to a global cash management pilot, enabling clients to transfer liquidity between Citi branches on a 24/7 basis.

Ryan Rugg, global head of digital assets at Citi treasury and trade solutions said: “Citi token services provide 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.”

Compliant, integrated and seamless technology solutions
The private/permissioned blockchain technology used is owned and managed by Citi and clients will not be required to host a blockchain node to access the services. Citi continues to develop digital asset solutions, in line with its goals and risk appetite, using a unified set of shared technology capabilities and a common strategic approach. These innovative solutions enhance Citi's products and services including digital money, trade, securities, custody, asset servicing and collateral mobility.

Citi TTS helps enable our clients' success by providing an integrated suite of innovative and tailored cash management and trade finance services to multinational corporations, financial institutions, and public sector organisations across the globe. Based on the foundation of the industry's largest proprietary network with banking licences in over 90 countries and globally integrated technology platforms, TTS continues to lead the way in offering a comprehensive range of digitally enabled treasury, trade, and liquidity management solutions.

Re-disseminated by The Asian Banker

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