Several financial institutions recently launched blockchain-powered tokenisation platforms, with both Citi and DBS launching commercial services using their own blockchain infrastructure in October. Will these initiatives push the blockchain further into use cases in the space?

Using Citi’s private and permissioned blockchain, Citi Token Services for Cash offers real-time, always-on cross-border payments services. The platform allows institutional clients, who are not required to own any tokens, to initiate instant payments and liquidity movement between participating Citi branches. 

Meanwhile, Singapore’s DBS released a tokenisation and smart contract-enabled platform for its lender’s clients, using a permissioned blockchain to provide treasury tokens, conditional payments and programmable rewards. 

Both Citi’s and DBS’s platforms replace traditional transactions with contracts backed by tokenised cash. With programmable contracts, banks could automate the complex administration of lines of credit while blockchain-powered infrastructure enables instant, 24/7 liquidity management. 

The Japanese banks MUFG, SMBC and Mizuho, meanwhile, piloted the integration of blockchain infrastructure with the Swift network in September, focusing on improving cross-border remittance services.

Similarly, First Abu Dhabi Bank partnered with J.P. Morgan to pilot programmable payments in September, using JPM Coin Blockchain Deposit Accounts. 

While the banks mainly focus on payments services, the Visa Tokenised Asset Platform (VTAP) lets participating financial institutions mint, burn and transfer fiat-backed tokens within a single API connection, while also supporting integrations between permissioned and public blockchains among financial institutions. Visa made the product available in a test environment in early October and BBVA, a Spanish lender, has adopted the VTAP to test the issuance, transfer and redemption of bank tokens. 

We’re likely to see more announcements to come involving blockchain-powered banking services, however, the question remains if blockchain will see sufficient pickup to expand the banking sector with new financial solutions in the long term.

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Niece Prayoonrat

Niece is a Data Journalism Intern at FXC Intelligence, writing reports and analysis to support the company’s weekly content and projects. She has a passion for finding insights and telling stories from financial data. She has an MSc in Media, Communication and Development from LSE and a BSc in Political Economy from King’s College London.