Citi to offer instant cross-border payments for Japanese firms via blockchain

The service, expected to launch as early as this year, will enable Japanese firms to send funds instantly, overcoming the delays often associated with traditional remittance methods that are constrained by differing business hours and multi-step reconciliation processes across intermediary banks. Citi's existing Citi Token Services (CTS) are already processing approximately $1 billion in transactions daily across five markets, including the United States and the United Kingdom.

Ambrish Bansal, Global Head of Products, Liquidity and Digital Assets at Citigroup, explained that CTS converts standard bank deposits into digital tokens on a blockchain. These tokens are then transferred in real-time through Citi's payment network to an overseas subsidiary or counterparty, and subsequently converted back into regular deposits upon receipt. A key feature of the service is its user-friendliness, as companies can initiate transfers from their existing Citi accounts without needing to understand or interact with the blockchain technology directly.

Deposit tokens are described as digitized bank deposits transferable on a blockchain, distinct from stablecoins as they are backed by bank deposits rather than reserve assets. This integration combines a bank's existing infrastructure with blockchain's real-time capabilities. The service's ability to operate continuously was demonstrated on July 4th, a U.S. holiday, when transactions continued uninterrupted, highlighting its potential to improve corporate liquidity management by allowing funds to be sent precisely when and where they are needed.