Citigroup has introduced a unique type of financial service for its commercial clients. The firm has introduced tokenized deposits to enable instant transfers and transactions. This service is issued by Citi Token Services and it is will work by converting deposits into digital tokens as a way to carry out instant transactions.
As per the bank officials, the tokenized deposit service will allow the institutional entities to perform transactions outside of the business hours and from anywhere around the globe. Head of Global Services, Shahmir Khaliq has told media that the new service is part of the next-gen transaction services for institutional consumers.
Citi bank offers financial services to some of the biggest enterprises around the world. The group has collaborated with Maersk to enable blockchain-backed payment options. However, the share of the bank is currently fairing at 15% lower in comparison to the year-to-date ATH.
Another important partnership of Citi is with BondBloX. This is a bond exchange that is facilitating digital custodial services for the group since last week. The press release issued by the bank has revealed some more details and insights into the new service.
Citi Launches New Financial Services Using Private Blockchain
The details about the project shared from bank have unveiled that the bank is using a private blockchain to extend the services. The firm has retained that it is offering the product on public blockchains such as Ethereum. Citi Token Services are directed towards institutional clients who do not create individual digital wallet accounts.
Khaliq has told media that the product is the result of further development on the Regulated Liability Network project. This project was working on bringing interoperability for digital payments options at an inter-bank level.
The bank is a listed entity in New York and it has announced plans to submerge into five main divisions. Another leading firm set to offer tokenized deposits is JP Morgan Chase. However, the service at the former is still under early stages of development as per internal reports.
The service was introduced by the Treasury and Trade Solution department of the banking enterprise. The main objective of this service is to enable cash management and allowing instant commercial transactions without intermediaries.
Mastercard has debuted the Multi-Token Network or MTN. The banking enterprise intends to start testing tokenized deposit services for banks and proceed to upgrade the same service using stablecoins and CBDCs.
Mastercard was set to launch the beta mode of CBDCs in UK in June. Raj Dhamodharan is head of crypto and blockchain at Mastercard. He has told media that global economy is powered by regulated money moving through banks.
He claimed that the tokenized deposit will treat deposited bank reserves represented as digital currencies on a blockchain. He revealed that these digital currencies are going to have the same amount of programmability as the mainstream virtual currency tokens.
The project is the continuation of the Crypto Credential initiative started by Mastercard. This second project is a blockchain analytics services that rolled out in April this year as a way to implement regulatory requirements on the CBDCs such as anti-money laundering.
Dhamodharan explained tokenized deposits as cross-border transfer of value. Before the introduction of the service, this type of direct inter-bank transfer entailed a lot of issues as per the executive.