Citigroup (C) CEO Jane Fraser has offered a clear stance on the future of digital finances, telling investors that tokenized deposits-not stablecoins-will be the main machine behind the next generation of payments and infrastructure in the financial market.
Speaking on a call to the investor following the third-quarter of the bank’s revenue on Tuesday, Fraser explained that institution’s clients are requesting a seamless, real-time movement of cross-border money cheap and compliant.
“What our clients want is interrelated, multi-bank, always-on-on payment solutions provided in a safe and orderly way,” he said. “It is best made of tokenized deposits.”
Citi has invested in the infrastructure of the digital asset, along with its own 24/7 US dollar clearing network. Fraser said the bank’s tokenized services can now linked more than 250 banks to more than 40 markets, enabling clients to transfer funds to suppliers and third parties immediately. However, he also noted that the biggest bottleneck in the wider adoption is not technical but that many corporate treasury departments are not yet ready for a 24/7 financial environment.
As Citi continues to support Stablecoins – offers/off ramps, custodial services and cash management for stablecoin providers – Fraser emphasized that they arrived with more operational friction. This includes regulations around anti-money laundering (AML), tax and accounting reporting. “Other requirements are what to prevent our tokenized capabilities in the deposit,” he said.
Fraser had earlier said that Citi explored the possibility of issuing its own stablecoin, but he warned against overhyping the asset class. “There is overfocus on Stablecoin right now,” he said. “Most of these are solved by tokenized deposit capabilities.”
At the forefront, Fraser sees tokenization expanding more than payments. He pointed to a future where everything was released and releasing from oil to equality -equivalent occurs in tokenized metals in a regulated, reliable environment.
The key, he said, is that the regulators are beginning to enable responsible change.
“We will give that as part of our toolkit,” Fraser said. “It is very nice that regulators allow us to change in a responsible way. This will really help the market development.”
