It seems that Citigroup (or “Citi”), which is the third largest bank in the U.S., has given up the idea of launching its own cryptocurrency (code-named “Citicoin”).

Citicoin — The Origin Story

On 1 July 2015, International Business Times (IBTimes) reported that Citigroup had been experimenting with blockchain technology and that it was toying with the idea of launching its own cryptocurrency. What was even more interesting was that fact that Ken Moore, Head of Citi Innovations Labs, told IBTimes UK during a technology briefing at that time that the bank had “been looking at distributed ledger technology for ‘the last few years’.”

Moore told them:

“We have up and running three separate systems within Citi now that actually deploy blockchain distributed ledger technologies. They are all within the labs just now so there is no real money passing through these systems yet, they are at a pre-production level to be clear.

We also have an equivalent to bitcoin up and running, again within the labs, so we can mine what we call a ‘Citicoin’, for want of a better term. It’s in the labs, but it’s to make sure we are at the leading edge of this technology and that we can exploit the opportunities within it.”

Moore added:

“Most of our efforts have been focused on payments; trade probably being a second runner… Because we are a global network, a global bank, we can look for opportunities to use this technology to move money from country to country – country A to country B, across our network.”

Moore also told IBTimes that “the bank’s wide ranging work in digitalising payments and transactions spans five large domains of which blockchain is just one.”

The End of Citicoin?

Now, however, according to a report in Coindesk, the Citicoin project, which came out of “Citigroup’s innovation lab in Dublin” and “never formally announced by the bank”, and which had the aim of improving the efficiency of global payments (just like JP Morgan’s “JPM Coin” project), is in trouble. 

This report says that Citi, “having taken stock of the experiment (not to mention the scorn of the bitcoin community at that time)”, has “concluded that, while the technology has the potential to live up to its promises, there were other more effective and efficient ways of making improvements in payments.”

Gulru Atak, Citi’s global Head of Innovation for Treasury and Trade Solutions, had this to say:

“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 fintechs as well or the regulators around the world as well, including SWIFT… 

We are trying to make those changes today, rather than just putting all our efforts into future technology…

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?”

She went on to explain that “Citi’s blockchain strategy in recent years” had “been about finding ways to integrate legacy systems,” citing as one example “the bank’s 2017 partnership with Nasdaq, CitiConnect, designed to streamline payments around private securities,” which she said had similarities to the JPM Coin project:

“[CitiConnect] didn’t issue stablecoins but the infrastructure that was used was similar to issuing coins on a blockchain platform… But it was purely to integrate into a blockchain-enabled system on our client’s end and make it connect to our legacy payment processes real-time.”

However, Citi is not giving up on blockchain technology, in particular continuing to explore its use for trade finance:

“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.”

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