Today Citigroup made a surprise announcement that they are now providing a new service that tokenizes their deposits and turns them into an unique cryptocurrency, that is stored using blockchain technology, and allows for cross-border payments.
This move comes just after the Federal Reserve launched your instant transfer payment system FedNow in July – a system that allows for real-time transactions and payments in just seconds, at any moment at any time; which, according to prior statements from the Feds and the Biden administration, lays the foundation for a central bank digital currency (CBDC).
Interestingly Citi was not involved in the initial pilot program to test and rollout FedNow, but the Federal Reserve has indicated that they seek to have all U.S. banks and other financial institutions join FedNow.
Citi explains their breaking move in a press release published today:
Citi Treasury and Trade Solutions (TTS) announces the creation and piloting of Citi Token Services for cash management and trade finance. The service uses blockchain and smart contract technologies to deliver digital asset solutions for institutional clients. Citi Token Services will integrate tokenized deposits and smart contracts into Citi’s global network, upgrading core cash management and trade finance capabilities.
Institutional clients have a need for ‘always-on’, programmable financial services and Citi Token Services will provide cross-border payments, liquidity, and automated trade finance solutions on a 24/7 basis.
Shahmir Khaliq, Global Head of Services, said,
Digital asset technologies have the potential to upgrade the regulated financial system by applying new technologies to existing legal instruments and well-established regulatory frameworks.
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.
This development goes hand-in-hand with our industry leading work on the Regulated Liability Network to create interoperable digital asset solutions on a multi-bank basis.
Citi Token Services For Trade
Citi worked with Maersk and a canal authority to digitize a solution that serves the same purpose as bank guarantees and letters of credit in the trade finance ecosystem. The pilot demonstrated programmable transfer of tokenized deposits that provided instant payments to service providers via smart contracts.
Marie-Laure Martin, Regional Treasury Manager for the Americas at Maersk, said,
We are pleased to have collaborated with Citi in the successful test pilots for the guarantee solution using digitized tokens and smart contracts. The innovative solution has promising applications for trade finance.
The technology used in the pilot provided a completely digital process to both buyers and sellers with instant payment capabilities, which is expected to reduce transaction processing times from days to minutes.
Citi Token Services For Cash
Citi Token Services has also been applied to a global cash management pilot, enabling clients to transfer liquidity between Citi branches on a 24/7 basis.
Ryan Rugg, Global Head of Digital Assets at Citi Treasury and Trade Solutions said,
Citi Token Services provides corporate treasurers with a new tool to manage global liquidity on a just-in-time, programmable basis. Frictions related to cut off times and gaps in the service window will be reduced. Our solutions within the Citi network are complemented by inclusive and open industry collaboration on initiatives like the Regulated Liability Network.
We are excited about both the potential for shared ledger technology to update Citi services, and the broader financial system in partnership with regulators and industry peers.
Compliant, Integrated And Seamless Technology Solutions
The private/permissioned blockchain technology used is owned and managed by Citi and clients will not be required to host a blockchain node to access the services.
Citi continues to develop digital asset solutions, in line with its goals and risk appetite, using a unified set of shared technology capabilities and a common strategic approach. These innovative solutions enhance Citi’s products and services including digital money, trade, securities, custody, asset servicing and collateral mobility.
Citi Treasury and Trade Solutions (TTS) helps enable our clients’ success by providing an integrated suite of innovative and tailored cash management and trade finance services to multinational corporations, financial institutions, and public sector organizations across the globe. Based on the foundation of the industry’s largest proprietary network with banking licenses in over 90 countries and globally integrated technology platforms, TTS continues to lead the way in offering a comprehensive range of digitally enabled treasury, trade, and liquidity management solutions.
Other megabanks have indicated that they will soon rollout something similar. Coin Telegraph noted in an article, ‘JPMorgan is also reportedly exploring the use of deposit tokens. That technology was pioneered in Project Guardian, launched in May 2022 by the Monetary Authority of Singapore, in which JPMorgan participated.’
As explained in a video report from Lena Petrova, CPA, citing other reports, Citi tested their new system with other world banks and the Federal Reserve, and found now there were no issues in converting the physical deposits into a digital dollar that then can be instantly transferred. This action indicates that the prospect of a CBDC is much father along than the Federal Reserve had led the public to believe.
AUTHOR COMMENTARY
This is major news that will get little to no press and will be swept under the rug, but it again emphasizes why I continue to warn people that they need to de-bank. This move represents that Citi, and obviously the other major players as well, can now readily and openly convert your dollar bills into a digital asset; and therefore means physical tender will start to incrementally disappear from the money supply and will be transformed into a solely a digitized asset on the blockchain.
This is clearly a move to further the CBDC agenda, there is no other way to look at it.
Thorns and snares are in the way of the froward: he that doth keep his soul shall be far from them.
Proverbs 22:5
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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