In partnership with Wellington and WisdomTree, Citigroup Inc. conducted a simulation regarding the tokenization of private funds in blockchain betting. This endeavor was intended to demonstrate how a blockchain network can tokenize a private equity fund. Wall Street could embrace distributed ledger technology more broadly if A/B testing proves fruitful.
Chainlink, a decentralized blockchain oracle network provider, partnered with SWIFT, an interbank messaging service, in mid-2023 with the aim of connecting to Sepolia, a widely recognized Ethereum testnet. This collaboration supported the tokenization testnet.
In less than two months after launching their new Cross-Chain Interoperability Protocol (CCIP), a blockchain communications network similar to Swift, the two companies successfully transferred tokenized assets between the testnet and other blockchains. Tokenization, the process of integrating blockchain networks with traditional financial assets, was the focus of the experiments.
Citi Bank, a global leader in the financial industry, is currently engaged in concerted efforts to develop a cash management solution that provides liquidity to corporate customers through an uninterrupted infrastructure that operates 24 hours a day, every day of the year. In a recent interview with their partner Chainlink, Ryan Rugg, the head of digital assets for Citi’s TTS division, revealed that the bank is implementing blockchain services and developing strategies to integrate tokenization into the private market .
Rugg was extremely excited that blockchain technology was recognized as a critical component in achieving Citi’s goal of customizable currency. Rugg noted that the two current solutions Citi offers to its customers are City Token Services for merchant transactions and City Token Services for cash transactions.
Citi Treasury and Trade Solutions (TTS) offers clients a variety of digitally enabled treasury, trading and liquidity management solutions. Citi owns and operates the private/permissioned blockchain technology, which allows customers to use its services without having to host a blockchain node.
Citi Treasury and Trade Solutions strengthen Citi’s solutions portfolio, which also includes asset management, digital currency, collateral mobility, trading, securities and custody. These solutions provide customers with an integrated range of common technology tools and a coherent strategic methodology. Furthermore, TTS is a market leader in providing tailor-made trade finance and cash management solutions, supported by state-of-the-art technological infrastructures and banking licenses in more than ninety countries.
By providing investors with private assets in new digital formats – resulting in improved compliance and automation – traditional partnerships and Digital Ledger Technology (DLT) will help additional banks and financial institutions meet complex legal and regulatory requirements. However, banks must ensure that all end-to-end data records, maintenance processes, digital identity options and tokenized cash transactions undergo a thorough regulatory and legislative compliance review before final resolution.
