Citigroup Uses DLT to Tokenize Deposits, Offer Always-on Banking
Citigroup, one of the biggest Wall Street banks, widened its push into digital assets on Monday after introducing a new solution that lets clients tokenize deposits. The effort comes amid a rapidly growing interest in on-chain tokenized assets, a market estimated to be valued at $16 trillion by 2030.
‘Real-Time, Always-On’ Settlements
Citigroup unveiled a new service allowing users to tokenize deposits and send those tokens instantly anywhere in the world, Bloomberg reported on Monday. The move represents a broader effort by Citi to provide institutional clients with exposure to digital assets.
The offering, dubbed ‘Citi Token Services,’ was developed to turn clients’ deposits into digital tokens. This process is performed using blockchain technology, meaning settlements will be instantaneous.
“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 the Citi’s services division.
According to the report, Citi Token Services is housed in the bank’s treasury and trade solutions unit, which has so far been concentrated on enhancing Citi’s cash management and trade finance products. Furthermore, the service is powered by Citi’s private blockchain, which means that clients will not be required to set up their digital wallet to use the feature.
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Growing Demand for Tokenized Assets
Citi’s push into tokenized assets underlines the growing institutional interest in blockchain-based financial products. On-chain tokenized assets are digital representations of real-world assets, like stocks or real estate, recorded and traded on blockchain platforms.
These solutions have become increasingly popular over recent years, mainly due to enhanced accessibility, allowing a broader range of investors to participate. Additionally, tokenized assets offer greater transparency, security, and sealed ownership records because they are launched on a blockchain.
Even more importantly, they reduce the need for intermediaries and can be traded around the clock, settling transactions in seconds. According to a 2022 global consulting firm BCG report, on-chain tokenized assets are expected to hit a market valuation of $16 trillion by 2030.
Earlier this year, SWIFT, an extensive messaging network used by banks and financial institutions, announced plans to collaborate with major banks to test how its broad infrastructure can transfer tokenized assets between private and public blockchains.
Have you used tokenized assets to make transfers? If so, let us know about your experience in the comments below.