Citi Treasury and Trade Solutions (TTS) has launched a new service aimed at facilitating cash management and trade finance for institutional investors.
This new service, Citi Token Services, uses blockchain and smart contract technologies to deliver digital asset solutions for institutional clients. Citi Token Services will integrate tokenized deposits and smart contracts into Citi’s global network, upgrading core cash management and trade finance capabilities.
“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,” Shahmir Khaliq, global head of services at Citi, said.
Specifically, Citi Token Services will provide cross-border payments, liquidity, and automated trade finance solutions on a 24/7 basis.
For example, Citi worked with Maersk and a canal authority to digitize a solution that serves the same purpose as bank guarantees and letters of credit in the trade finance ecosystem. This pilot program demonstrated programmable transfer of tokenized deposits that provided instant payments to service providers via smart contracts. The technology used in the pilot provided a completely digital process to both buyers and sellers with instant payment capabilities. This is expected to reduce transaction processing times from days to minutes.
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.
“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,” Ryan Rugg, global head of digital assets at Citi Treasury and Trade Solutions, said.
Further, the blockchain technology used for this effort is owned and managed by Citi so clients will not be required to host a blockchain node to access the services.