Citi, an investment banking giant, has officially entered the cryptocurrency space with the launch of its ‘Citi Token Services’ program. Through the program, the company will offer institutional clients the ability to take advantage of 24/7 financial services. Citi will do this by tokenizing deposits.
Among the 24/7 financial services offered are cross-border payments, liquidity, and automated trade finance solutions. One Citi executive gave the example of a businessperson from the United States who needed to settle a payment in Singapore. While in the past that process would have taken days, now it can be done in seconds. In addition, institutional clients will now be able to transfer funds between Citi branches 24/7.
The program uses a private blockchain that the bank manages. Therefore, clients of Citi will not need to run their own nodes to participate. The blockchain enables smart contract transactions, a common feature among Ethereum and newer blockchains where actions can occur when a set of agreed conditions has been met.
The genesis of Citi Token Services came from a pilot study between the bank and Maersk, a Danish shipping and logistics company. With Citi’s blockchain, the two entities were able to digitize a solution similar to bank guarantees and letters of credit. The pilot study showed tokenized deposits could be used for instant payments to service providers.
Shahmir Khaliq, Citi’s Global Head of Services, said in a statement that the development of Citi Token Services is part of the company’s journey to provide real-time, next generation transaction banking services to institutional clients. He added that digital asset technologies have the potential to upgrade the existing financial system.
Rarity Sniper has reached out to Citi for comment and will update this article if it responds.
Banks Bet Big on Web3
While this crypto bear market has been tough on investors, there have been few periods that signal such optimism in the space. That is shown in the stories we cover every day: signals of an approaching mass adoption. Even banks, normally seen as staid institutions, have gotten in on the action. Here are three stories involving banks in Web3.
First, two months ago, Bank of America revealed that it has been using the metaverse and artificial intelligence to train employees. Many of the simulations involve high stakes, such as robberies. As one executive said, the technology allows employees to handle the situation under realistic conditions, while there is no actual danger present.
Next, also two months ago, India’s PNB Bank opened a branch in the metaverse. Customers can now perform a variety of tasks in the bank’s virtual branch, such as apply for loans, make deposits, and other ‘Do It Yourself’ options. PNB Bank is India’s third-largest public sector bank, making the move a big deal.
Lastly, nine months ago, British Bank HSBC filed trademark applications for NFTs and the metaverse. The trademarks related to downloadable virtual goods and computer programs featuring credit cards. The move indicates that the bank plans to offer financial services in the metaverse.
As the stories show, more banks are adopting Web3 technologies. Rarity Sniper sees that as a win for the industry. We’ll keep an eye on today’s story and update it with any future developments.