Citi is upgrading some of its services for institutional clients using blockchain technology.
The banking giant introduced Citi Token Services on Monday, which will tokenize clients’ deposits so they can be sent anywhere in the world instantly.
″[If] you’re a large multinational client where you have multiple bank accounts in multiple different regions across borders and you keep buffers of cash in each of these regions, it’s really an inefficient use of cash,” Ryan Rugg, global head of digital assets for Citi’s Treasury and Trade Solutions business, said. With the new service, “if it’s … 5:00 p.m. in the U.S. and 5:00 a.m. in Singapore, but you need to get money there, you can send that immediately, within seconds.”
The bank is also now using smart contracts to automate the trade process. Smart contracts are self-executing programs that run automatically when the conditions of an agreement or contract are met.
Citi tested the smart contract capability with shipping and logistics giant Maersk, a client of the bank. Rugg explained how the company prefunded a smart contract with digitized tokens. Once the company had received agreed-upon services from a canal authority, the token was automatically paid out. Citi’s service could reduce transaction processing times from days to minutes, Rugg said.