Citigroup Considered a Bank-Backed Cryptocurrency in 2015
By Tyler Smith – Cryptocurrency Expert
Citi, the financial services and products provider for major consumers, corporations, governments and institutions, reportedly investigated developing a cryptocurrency back in 2015 as described through Coindesk. The coin was Code named ‘Citicoin’ which never got announced or reached the proof-of-concept stage. The coin aimed to address many of the inefficiencies current traditional financial systems experienced with global payments.
Citi’s research concluded that the Citicoin project would have the potential to reduce inefficiencies and improve the effectiveness of payments but suggested other better ways to improve the system. Instead of introducing a new crypto, Citi have decided to make purposeful improvements to the existing payment rails. This makes it unlikely that we will be able to buy cryptocurrency native to Citi for global payments.
Citi have expressed they are looking at shorter-term solutions which can make changes today instead of developing an entirely new system. A whole new system would need to integrate with all the major banks to utilise the benefits whereas Citi’s approach is to improve on the SWIFT system already set up with major banking institutions around the world.
The company still has a focus on the blockchain industry but with the aim of integrating the legacy systems into them. Buying crypto doesn’t always utilise the full functions of a blockchain and many smart contracts can be used to record and automate processes. Though the legacy systems are not able to process global payments at the rate of a cryptocurrency, they could be used in tandem.
As one of the largest custodians for financial instruments, Citi have an opportunity to diverse into cryptocurrency custodian of digital assets. Many large financial institutions may buy BTC but do not wish to safeguard their own assets and pursue alternative storage. When questioned on custodians, Citi’s Innovation Lab Chief Gulru Atak stated: ‘Not within our business, but the businesses we are responsible for; that is a function they are looking into’. We could buy XRP in the future and store in a custodian affiliated with Citi in the future.
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