Citigroup (C), the largest bank in the United States, announced on Monday that it has begun offering institutional clients a tokenization service for cash management and trade finance that uses blockchain technology and smart contracts. According to the bank, the aim of the smart contracts is identical to that of bank guarantees and letters of credit.
In a pilot, the bank collaborated with a canal authority and the shipping company Maersk to try and speed up the procedures, which are often drawn-out and difficult due to the paperwork and manual procedures required.
Citi Token Services will offer cross-border payments, liquidity, and automated trade finance solutions on a 24/7 basis, the bank stated. “Institutional clients have a need for ‘always-on,’ programmable financial services.” Citi predicted that by 2030, the market for tokenizing digital securities would be worth $4–5 trillion.