Citi's Vision: Transforming Treasury Operations with Tokenisation

Financial landscapes are rapidly evolving as institutions race towards creating borderless, always-accessible financial systems. This transition is not about if it's achievable but rather how quickly it can be accomplished.

Citi's Commitment to Digital Assets

Citi has made significant strides in developing robust digital asset capabilities for their treasury services. By continuously investing in blockchain and tokenisation technologies, they are laying the groundwork for a financial future where cash, securities, and trade instruments will flow seamlessly across networks worldwide.

Focusing on real-world client needs, Citi aims to expand its offerings in tokenised deposits, enhance interoperability, and develop new solutions for digital asset custody. This includes the launch of tokenised securities, which reinforces their commitment to modernising financial transactions within a regulated framework.

Addressing the 'Always-On' Demand

According to SP Mohanty, Citi's head of services for Malaysia, the modern economy demands a shift from traditional banking timetables. “In a world where you can stream a show or shop at any hour, the underpinnings of global finance should reflect that 24/7 reality,” he explains. A significant portion of the existing finance infrastructure still relies on outdated methods that rely on batch processing and fixed cut-off times.

Over the past five years, Citi has been crafting a seamless connection between conventional banking and the emerging world of tokenised currency. Their strategy aims to alleviate the complexities for corporate treasurers, allowing clients to enjoy an improved banking experience.

Transforming Liquidity Management

Currently, Citi processes about $6 trillion daily across more than 180 nations. The goal is to make digital assets readily accessible for institutional finance, collaborating with fintech companies and leading businesses to achieve this transformation.

A prime example of this innovation is Citi Token Services, which operates using a private permissioned blockchain to enable near-instant transfer of tokenised deposits across borders. Active in seven markets including the US and UK, this service currently facilitates daily transactions of approximately $1 billion, proving vital for liquidity and working capital management.

For corporate treasurers, the implications are extensive. Funds that were previously stagnant due to time zone restrictions or missed deadlines can now be mobilised at any given time.

“Businesses no longer need to maintain unnecessary balances in local accounts,” Mohanty adds. “They can access their capital wherever and whenever it's needed.”

Innovating Beyond Payments

Recently, Citi has integrated its cash solutions with its 24/7 USD Clearing system, extending their always-on framework beyond their immediate network. This integrated capability now connects over 300 financial institutions in over 50 markets, fostering a bridge between digital and traditional banking.

In a practical demonstration, during a US holiday, Citi and Siam Commercial Bank facilitated a swift USD transfer from London to Thailand. This transaction bypassed traditional clearing systems, showcasing the capabilities of modern digital finance.

Mohanty likens the prior processes to sending a physical letter globally; if postal services are paused for holidays, transactions remain dormant. The new system reduces settlement risk by enabling simultaneous movement and settlement of money.

However, the need for an enhanced securities and custody infrastructure remains evident. Citi is expanding its capabilities to manage digital assets and is preparing to offer bank-grade custody for assets like Bitcoin, as part of its Custody+ platform.

Pioneering Capital Market Innovations

Citi has taken the lead in the tokenisation of financial instruments with initiatives such as the Digital Depositary Receipt, marking the first tokenised depositary receipts for private shares. Acting as both the issuer and custodian, Citi is increasingly positioned at the intersection of distributed ledger technology and traditional capital markets.

“Our clients are clear: they desire both the speed and innovative potential of digital assets combined with the trust that comes from regulated banking. Our custody approach embraces this balance,” Mohanty asserts.

Citi is also equipping virtual asset firms with the essential treasury infrastructure and gateways needed to merge modern and traditional financial systems, highlighting the ongoing evolution of their client base.

Understanding Tokenisation and Its Potential

Tokenisation represents a digital format of ownership, claims, or rights pertaining to assets, recorded on a blockchain or similar technologies. This process can involve either the digital reprisal of existing assets or the issuance of new assets directly onto distributed ledgers.

These tokens carry vital details about assets including ownership and transaction history, allowing for direct and rapid transfers of value while maintaining a unified record. This technology spans a range of assets, from stocks and bonds to real estate and intellectual property.

However, while the potential of tokenisation is vast, adoption rates remain in their infancy. Citi Institute reports that tokenised assets were valued at about $17 billion in 2026 and could rise to $5.5 trillion by 2030, though the technology's adoption rate measures only 1.5 out of 10.

Despite challenges, the conversation around distributed ledger technology in banking has shifted from skepticism to implementation, with Citi leading the way. Their focus on connectivity rather than isolation underscores a forward-thinking approach to integrating traditional and digital financial systems.

As Mohanty succinctly puts it, “Only when trapped liquidity is a historical footnote will we know success has been achieved.”