Financial services and banking giant Citigroup is reportedly launching a unique private blockchain for its clients.
According to a new Bloombergreport, Citigroup has unveiled Citi Token Services, a product aimed at tokenizing client deposits.
The service is reportedly focused on improving cash management and trade-finance capabilities, such as increasing the speed of transactions.
Says Citigroup’s global head of services, Shahmir Khaliq,
“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.”
The so-called “tokenized deposits” represent bank claims and are instantaneously transferrable on the blockchain.
Citigroup tested the new system with the Federal Reserve Bank of New York, according to the Bloomberg report. The system enables banks to generate digital money for their customers, which can then be cleared using central bank reserves. The test was deemed successful, and indicated that digital dollars can enhance wholesale payments without altering the legal treatment of deposits.
Global head of digital assets at Citigroups treasury and trade solutions division, Ryan Ruggs, says:
“Frictions related to cutoff 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.”
Fellow financial giant JP Morgan & Chase is reportedly developing similar technologies.
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