Following the cancellation of plans by JP Morgan launching a cryptocurrency, the Citi Bank supported cryptocurrency has also been shown the red flag. The Bank tested the coin for the first time in 2015. The currency was named as CitiCoin. It was never formally introduced to the market. As per reports, the coin was being tested in Citigroup’s lab in Dublin. The idea intended to introduce a coin which would streamline the global payment.
However, after reviewing the product to the fullest, Citi opined that though the currency has the potentials of doing what it was meant for, there are numerous other ways through which the global payment system can be robust. As far as the crypto experiments of Citigroup is concerned, its innovation lab chief, Gulru Atak, global head of innovation for treasury and trade solutions said, “Based on our learnings from that experiment we actually decided to make meaningful improvements in the existing rails by leveraging the payments ecosystem and within that ecosystem, we are considering the fitness as well or the regulators around the world as well, including SWIFT.”
Atak also said in order to improve the cross-border payment system, there are many effective ways but within a shorter impact ambit. Citigroup is planning to make such changes for today, rather not looking at a longer-term future. As per Citigroup, in order to bring about any changes in the global payment system, all banks in the world, as well as the Central Banks of each nation, have to be on board. Atak added, “If we are talking about cross border payments, how many banks do we have across the world – and how many of them are already on-boarded on SWIFT? And how long has it taken SWIFT to onboard all those banks?”
According to Atak, Citi’s blockchain technology’s aim was to integrate the things which were part of Citi’s legacy. They have always wanted to integrate the Blockchain system into the client’s end and to make it connect to our legacy payment processes.
As per Atak, though, the company is content on its development on Blockchain, it continues to improve and innovate in areas like trade finance with respect to the blockchain. As per her, this niche would be more realistic as in trade finance to make a change there would not be any need to take loads of banks and institutions on board. She said, “Our focus is currently more in the trade space and trade finance and trade letters of credit. We are experimenting with this technology, but probably we are a little bit, like, reserved when it comes to making bold public announcements.”
Meanwhile, Citi’s major rival HSBC is making big strong steps towards the futurization of its payment system. As per HSBC, it had settled $250 billion of foreign exchange (FX) trades with the help of blockchain technology in 2018.
Regarding FX, Opeyemi Olomo, blockchain lead from Citi’s Innovation Lab, said that there is an enormous opportunity in trade finance. As far as Foreign exchange is concerned, for liquidity, there are not many players in this sector. So, if anyone thinks of making this ecosystem its business model, it would have to take five or six equal players on board to achieve something significant.