Citi, one of the leading global banks, has announced that it is expanding its digital asset services with two new offerings: bond custody and tokenized deposits. These services aim to provide institutional clients with more options and flexibility to access the emerging opportunities in the crypto space.
Bond custody is a service that allows Citi to hold and manage digital bonds on behalf of its clients, using blockchain technology to ensure security and transparency. Citi has partnered with Securitize, a platform that enables the issuance and management of digital securities, to offer this service. Citi will leverage Securitize’s Digital Securities Protocol (DS Protocol) to create, transfer and store digital bonds on the Ethereum blockchain.
Tokenized deposits are a service that allows Citi to issue tokens that represent deposits held at the bank, using blockchain technology to enable faster and cheaper transactions. Citi has partnered with ConsenSys, a leading software company that builds solutions for the Ethereum ecosystem, to offer this service. Citi will use ConsenSys’ Codefi Payments platform to create, transfer and redeem tokenized deposits on the Ethereum blockchain.
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These services are part of Citi’s broader strategy to embrace digital transformation and innovation in the financial sector. Citi has been actively exploring and experimenting with blockchain and crypto technologies since 2014, when it launched its first internal blockchain lab. Since then, Citi has participated in various initiatives and projects related to digital assets, such as the Utility Settlement Coin (USC) consortium, the World Economic Forum’s Global Blockchain Council, and the Bankchain project.
Some of the reasons why Citi Bank is navigating into blockchain are:
To improve efficiency and reduce costs: Blockchain can streamline and automate various processes, such as cross-border payments, trade finance, and reconciliation. By using blockchain, Citi Bank can reduce operational costs, human errors, and fraud risks. For example, Citi Bank has partnered with Nasdaq to use blockchain for private securities settlements. This can reduce the settlement time from days to minutes and lower the capital requirements.
To enhance customer experience and satisfaction: Blockchain can offer faster, cheaper, and more convenient services to customers. By using blockchain, Citi Bank can provide more transparency, security, and control to customers over their transactions and data. For example, Citi Bank has launched a blockchain-based platform called CitiConnect for Blockchain to enable its clients to access distributed ledger technology (DLT) solutions from various providers. This can help clients to access new markets, optimize liquidity, and improve cash management.
To innovate and differentiate: Blockchain can enable new business models, products, and services that can create value for customers and stakeholders. By using blockchain, Citi Bank can gain a competitive edge and position itself as a leader in the digital economy. For example, Citi Bank has joined the Enterprise Ethereum Alliance (EEA), a consortium of organizations that are developing standards and best practices for using Ethereum blockchain. This can help Citi Bank to collaborate with other members and explore new use cases for blockchain.
Citi’s Head of Digital Assets, Puneet Singhvi, said: “We are excited to launch these new services that will enable our clients to access the growing opportunities in the digital asset space. We believe that blockchain and crypto technologies have the potential to transform the financial industry and create new value for our clients and society. We are committed to continue exploring and developing innovative solutions that leverage these technologies to meet the evolving needs of our clients.”
