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Citigroup (NYSE:C) has created and tested out a new digital asset service that uses blockchain and smart contract technologies to deliver institutional clients enhanced core cash management and trade finance capabilities, a division of the bank’s Institutional Clients Group said on Monday.
Citi Token Services, developed by Citi Treasury and Trade, will integrate tokenized deposits and smart contracts into Citi’s (C) global network to enable instant cross-border payments, liquidity, and automated trade finance solutions on a 24/7 basis.
“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,” said Shahmir Khaliq, global head of Services.
Specifically, Citi (C) collaborated 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. The pilot demonstrated programmable transfer of tokenized deposits that provided real-time payments to service providers through smart contracts.
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.
The move underscores how financial heavyweights are further delving into cryptos’ underlying blockchain technology in hopes of upgrading traditional finance services. In May 2021, when crypto prices surged to all-time highs, Citi (C) reportedly mulled offering crypto-related services, including trading, financing and custody, as its clients showed increased interest in the sector at the time.
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