Investment banking giant Citigroup (parent company of US-based Citibank) today announced plans to launch a digital token service for its clients.
The Citi Token service product will use blockchain and smart contract technology to allow its institutional clients to send money between countries quickly, Citi said on Monday. The technology will use a private blockchain – not a public blockchain like Bitcoin or Ethereum. They added that it will provide a 24/7 automated financial trading solution.
“Digital asset technology has the potential to enhance the regulated financial system by applying new technologies to existing legal instruments and well-regulated frameworks,” Citi’s global head of services Shahmir Khaliq said in a statement.
Citibank is working with integrated logistics company Maersk on a pilot to see how they can work with the shipping industry. Banks consider the shipping industry challenging due to complex payment collections and transaction processing. Citi claims that the technology used in the trial “will reduce transaction processing time from days to minutes.”
In a March report, Citi said that the world of digital assets is approaching an “inflection point” and that crypto adoption will be supported primarily by the presence of central bank digital currencies (CBDCs) as well as the tokenization of real-world assets.
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