Citi Launches Digital Asset Solution for Cash Management, Trade Finance

Citi Treasury and Trade Solutions has unveiled a digital asset solution designed to enhance cash management and trade finance capabilities.

By using blockchain and smart contracts, the new Citi Token Services aims to provide institutional clients with “always-on” and programmable financial services, including cross-border payments, liquidity and automated trade finance solutions, the bank said in a Monday (Sept. 18) press release.

“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,” Shahmir Khaliq, global head of services at Citi, said in the release.

The initiative is part of a broader effort, including the Regulated Liability Network, to create interoperable digital asset solutions on a multi-bank basis, Khaliq added in the release.

One application of Citi Token Services is in trade finance, according to the release. Citi collaborated with Maersk and a canal authority to digitize a solution that replicates the functions of bank guarantees and letters of credit. The successful pilot demonstrated the programmable transfer of tokenized deposits, enabling instant payments to service providers through smart contracts.

The technology used in the pilot offers a fully digital process for both buyers and sellers, significantly reducing transaction processing times from days to minutes, the release said.

Citi Token Services has also been implemented in a global cash management pilot, allowing clients to transfer liquidity between Citi branches on a 24/7 basis, per the release. This enables corporate treasurers to manage global liquidity in a just-in-time and programmable manner. Ryan Rugg, global head of digital assets at Citi Treasury and Trade Solutions, said in the release that this service will eliminate frictions related to cut-off times and gaps in the service window.

The private/permissioned blockchain technology used in Citi Token Services is owned and managed by Citi, eliminating the need for clients to host a blockchain node to access the services, according to the release.

The unveiling of Citi Token Services comes about a week after Citi Treasury and Trade Solutions added a suite of payment solutions tailored for financial institutions, aiming to help them enhance their client experience.

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