Citi plans to launch a blockchain-based cross-border payments service for Japanese companies this year, allowing businesses to execute instant foreign-currency transfers across key global hubs, including Hong Kong, outside standard banking hours.
As reported by Nikkei Asia, Shahmir Khaliq, Head of Services at Citi, said the planned rollout would be the first time a foreign financial institution has offered this type of service to corporate customers in Japan.
Traditional cross-border payments rely on standard banking hours and settlement calendars.
Companies often have to send money in advance to account for international holidays, tying up capital and increasing funding costs.
Tokenised deposits convert bank deposits into digital representations that can be transferred using blockchain infrastructure.
Citi’s service will allow corporate clients to transfer funds instantly between Japan and its operations in the US, UK, Singapore, Hong Kong and Ireland.
Khaliq said expanding the service to Japan would help Citi cover major financial hubs across the Asia Pacific region.
Citi moves around US$6 trillion in funds daily. Its tokenised deposit transactions have reached approximately US$1 billion in daily volume.
Citi plans to extend its tokenised deposit capabilities to connect with other banks in the future.
The bank is working with global financial messaging network SWIFT and US payments operator The Clearing House to build the infrastructure needed for broader interoperability.
Citi has already begun testing this model.
Recently, the bank processed live transactions on SWIFT’s blockchain-based ledger with First Abu Dhabi Bank and OCBC, with DBS and UOB also set to participate.
Featured image credit: Edited by Fintech News Hong Kong, based on image by magnific via Magnific