The process of tokenizing traditional assets—like shares—entails turning them into electronic tokens that can be exchanged on a blockchain. This has several benefits in the financial industry, such as increased liquidity, lower costs, fractional ownership, and many more.
The programme, known as Citi Token Services, would transform clients' deposits into virtual tokens that could be transferred anywhere in the world, according to a statement issued on Monday. The service is managed by the company's treasury and trade solutions division, which has so far focused on using it to improve cash-management and trade-finance abilities.
Shahmir Khaliq, the company's global head of services, stated that the establishment of Citi Token Services "is part of our journey to deliver real-time, always-on, next generation transaction banking services to our institutional clients."
The initiative is the most recent by a well-known banking behemoth to offer so-called "tokenized deposits," or transferrable digital currency that stands in for a bank's claim. According to the release, Citigroup will utilise a private blockchain that is owned and operated by the bank for its new product. Customers can use the service using the bank's current systems without having to create their own digital wallet.
Citibank's tokenization could help to drive crypto adoption in the following ways:
It will make crypto more accessible to a wider range of investors. By tokenizing shares, Citibank is making it possible for people to invest in crypto even if they don't have a lot of money. This could help to bring new investors into the crypto market.
It will also increase the liquidity of crypto assets. As more and more shares are tokenized, the crypto market will become more liquid. This will make it easier for investors to buy and sell crypto assets, and it will also help to reduce volatility.
It will also help to legitimize crypto. Citibank is one of the most respected financial institutions in the world. Its tokenization of shares is a sign that crypto is becoming more mainstream and that it is a viable investment option.
Was that why Citi group closed retail banking operations in Australia, UK and some part of Asia? To tokenize customers' deposit and make it more easier, cheaper and faster to make transaction? This will really reduce operational cost and make transactions faster using blockchain. It's a huge win for crypto and blockchain adoption with Citi boasting over 200 million customers across more than 160 countries. That's gonna be huge a crypto market waiting to boom! Gradually, I believe other crypto services will be added and more financial institutions will start seeing the need to implement such move just as how Citi group pioneered the adoption of ATM machines and online banking in the 1970s and 1982 respectively.
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