On September 18, 2023, Citigroup launched one of the most innovative services in the realm of Web 3.0. This move not only marks Citigroup’s presence in Web 3.0 but also signifies its dedication to assisting institutional clients through the introduction of Citi Token Services.
This groundbreaking offering leverages a private blockchain platform and smart contracts to provide institutional clients with a range of digital asset solutions, including 24/7 cross-border payments, automated trade finance solutions, and enhanced liquidity management.
The primary objectives of Citi Token Services are to ensure round-the-clock accessibility, enhance operational efficiency, optimize liquidity management, and provide user-friendly accessibility. It is designed to promote ongoing innovation across various financial services through the utilization of blockchain technology and smart contracts.
Citi Treasury and Trade Solutions (TTS), operating in more than 90 countries, conducted two successful pilot programs on this platform. The first pilot involved a collaboration with Maersk, a Danish shipping company, and the Canal Authority, enabling instant payments to service providers through smart contracts. This innovative approach reduced transaction times from days to minutes, poised to replace traditional bank guarantees and letters of credit within the finance ecosystem.
The second pilot centered on facilitating global cash management and liquidity transfers among Citi branches, offering clients the ability to transfer liquidity 24/7. This initiative aimed to address challenges related to cutoff times and service windows. Together, these pilots underscore Citi’s commitment to utilizing blockchain technology and smart contracts to enhance financial services for its institutional clients.
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This initiative aligns seamlessly with Citi’s dedication to collaborative efforts, such as the Regulated Liability Network (RLN), introduced in November 2022. Citigroup actively participated in a proof-of-concept led by the Federal Reserve Bank of New York, which sought to harness RLN technology for atomic settlement, wherein assets and liabilities coexist on the same ledger.
Recently, in a report by Todayq News on August 29, 2023, Mastercard unveiled the Multi Token Network (MTN) to streamline secure blockchain transactions for consumers, merchants, and banks, introducing the concept of a “multi-chain layer-2” as a network overlay for traditional finance systems, without its consensus mechanism. A London blockchain innovation event showcased fintech startup Polytrade successfully integrating its platform with MTN.