Citi has expanded its blockchain Token Services in Japan, allowing institutional clients to make US dollar transfers 24/7. The service is now available in Japan and the United Arab Emirates, increasing the bank's presence to seven markets, including the US, Ireland, Hong Kong, Singapore, and the UK. Japan will support dollar transactions, while clients in the UAE can transfer both dollars and euros. Citi's Token Services uses tokenized bank deposits on a private permissioned blockchain platform.
Clients with eligible accounts can transfer funds between Citi's supported markets without the restrictions of regular banking hours. The service provides Japanese companies with another option for fast international dollar transfers at a time when stablecoin projects are targeting corporate settlements and cross-border transactions. Citi clients can transfer funds while keeping them in commercial bank accounts, avoiding the need to acquire an independent stablecoin for network transfers. Stephen Randall, head of Citi's global liquidity management services, stated that the expansion in Japan and the UAE will give clients "greater flexibility to move and manage liquidity across regions and currencies in real-time." Japan within the network is focused on dollars. Japanese banks such as MUFG, SMBC, and Mizuho are also developing their stablecoins, aiming for active transactions by March 2027. These banks are working on creating a common infrastructure for issuance, management, and operational processes. A recent test with Japan's financial service demonstrated potential corporate cross-border transactions involving Mitsubishi Corporation.
Competition between tokenized deposits and stablecoins will be observed in some institutional payment flows. During testing, tokenized commercial bank deposits demonstrated their efficiency in international transfers, which were completed in minutes, as shown in a recent case between DBS and Citi. Ryan Kirkley, CEO of Global Settlement Network, cautioned that completing a transaction on a digital ledger does not always mean that all obligations reach final legal settlement at the same moment. The development of stablecoins in Japan extends beyond the largest banks. Participants in the six-month EJPY trial project, aimed at exploring the potential use of a yen stablecoin, include companies like Toshiba and 25 others. The program, scheduled until February 2027, covers domestic payments, transfers, business settlements, and cross-border transactions.
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