Citibank’s recent announcement about offering blockchain technology for institutional savings, transmutable into ‘Citibank tokens’ for 24/7 cross-border transactions, is a game-changing move. In a tweet, Investor and entrepreneur Robert Kiyosaki suggested that Citibank’s latest move in blockchain technology might signal a watershed moment for Bitcoin and the US Dollar.
Citi Treasury and Trade Solutions (TTS) announced on the 18th of September that they are piloting Citi Token Services, a new initiative designed to harness blockchain and innovative contract technologies. This development aims to deliver digital asset solutions that provide 24/7 programmable financial services for institutional clients. Citi Token Services promises to offer cross-border payments, liquidity management, and automated trade finance solutions that integrate with Citi’s global network.
“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,” – Shahmir Khaliq, Global Head of Services at Citi.
However, this declaration is not without its skeptics. One crypto user clapped back, asserting that Citibank’s new service wouldn’t deter them from using Bitcoin and other decentralized finance options.
Breaking Down the Innovation
Citi collaborated with shipping giant Maersk and a canal authority to digitize solutions akin to bank guarantees and letters of credit in trade finance. The pilot featured instant, programmable transfers via smart contracts. The technology was also tested in a global cash management scheme that enables instantaneous liquidity transfers between Citi branches.
Decentralization Vs. Centralization
While Kiyosaki’s tweet raises some eyebrows, the broader debate here seems to center on the age-old question of centralization versus decentralization. Contrary to public blockchains like Bitcoin, Citi’s blockchain is private and permissioned, controlled solely by Citi, removing the need for clients to host a blockchain node.
It is perhaps too early to say “BYE BYE” to Bitcoin or the US Dollar. Citibank’s tokens may become essential to the financial landscape, but they are unlikely to replace these longstanding pillars entirely. Citi’s move is another example of the blurring lines between traditional finance and digital assets.