Citigroup to launch private blockchain pilot for institutional clients

The pilot program uses a private blockchain owned and managed by Citi.

Citigroup today announced the launch of a new pilot program, Citi Token Services, which will allow institutional clients to use blockchain technology and smart contracts for cross-border payments and trade finance transactions.

The new service will allow Citi’s institutional clients to access the bank’s private blockchain network from their existing accounts without the need to create new digital wallets or operate blockchain nodes.

“The development of Citi Token Services is part of our effort to deliver real-time, always-on, next-generation transaction banking services to institutional clients,” said Shahmir Khaliq, Citi’s global head of services.

Through the Citi Token Service, customers will be able to make instant, 24/7 cross-border transfers between Citi branches using blockchain rails.

“There will be less friction associated with deadlines and gaps in service windows,” said Ryan Rugg, global head of digital assets for Citi Treasury and Trading Solutions.

Citi has partnered with Maersk, a major leader in global shipping, to test the use of smart contracts to replace traditional trade finance instruments such as letters of credit and bank guarantees, which are traditionally used to secure transactions for buyers and sellers.

Marie-Laure Martin, regional finance manager at Maersk, said: “This innovative solution has broad application prospects in trade finance.”

Citi’s blockchain pilot comes just months after Citi successfully tested blockchain-based cross-border payments, known as the Regulatory Accountability Network, alongside the New York Fed and other banks.

The banking giant serves 200 million customers in more than 160 countries, including public sector organizations, multinational corporations and financial institutions.