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Major Banks Advance Blockchain Use With Digital Cash, Stablecoins

Two of the world’s largest financial institutions, Citi and Société Générale, are making strides in blockchain technology and unveiling new initiatives that could reshape traditional banking processes.

During a recent panel at Benzinga’s Future of Digital Assets event, Citi’s Ioana Niculcea and Société Générale’s Thomas Sullivan shared their companies’ latest advancements in tokenization and digital finance.

Citi’s Tokenized Deposit Solution

Citi launched a tokenized inter-branch deposit system called Citi Digital Cash. This live and operational solution facilitates transactions between the U.S. and Singapore, allowing faster, more efficient cash movements within the bank’s network.

“Our Citi Digital Cash solution — inter-branch tokenized deposits for the U.S.-Singapore corridor — is now live and commercial,” Niculcea said during the panel discussion.

She emphasized the ability to integrate digital and analog financial systems is critical for clients. As the demand for seamless access to both traditional and digital assets grows, solutions like Citi Digital Cash demonstrate the bank’s commitment to modernizing infrastructure while maintaining compliance.

Société Générale’s Euro-Denominated Stablecoin

Société Générale, through its SG Forge subsidiary, has issued a euro-denominated stablecoin on Ethereum. The stablecoin, compliant with the European Union’s Markets in Crypto-Assets (MiCA) regulation, is designed to operate on a public blockchain, offering a secure and scalable option for digital payments.

“SG Forge’s Euro-denominated stablecoin is permissionless, MiCA-compliant, and transferable on Ethereum,” Sullivan explained, adding that the innovation represents a new frontier in financial services.

Sullivan also highlighted the importance of structuring SG Forge as a ring-fenced subsidiary, allowing it to operate independently while maintaining the bank’s overarching compliance standards. This setup reflects a growing trend among institutions to separate digital asset divisions for operational flexibility.

Why It Matters

These initiatives signal a shift in the financial sector toward blockchain adoption, driven by its potential to reduce costs and improve efficiency. Niculcea pointed out that tokenization enables programmable transactions, streamlines operations, and provides transparency.

“Programmability is what makes this approach transformative, allowing for pre-programmed conditions and automated workflows,” she noted. For Société Générale, the introduction of a compliant, public blockchain-based stablecoin demonstrates the scalability and practicality of digital finance in a heavily regulated environment.

Challenges Ahead

Despite progress, the panelists acknowledged hurdles in integrating blockchain into traditional finance. Regulatory clarity remains a significant barrier. Sullivan pointed out that many regulatory bodies have yet to adapt to the technology, slowing adoption.

“The SEC hasn’t allowed a transfer agent to use blockchain as the source of truth. Until regulations catch up, some processes will remain tethered to traditional methods,” Sullivan said. Meanwhile, Niculcea highlighted the need for interoperability across systems to achieve scale, emphasizing collaboration among financial institutions and technology providers.

A Glimpse Into the Future

As banks like Citi and Société Générale push the boundaries of blockchain applications, the financial sector is watching closely. Their advancements demonstrate the potential for digital asset integration and pave the way for a more interconnected financial ecosystem. For institutions and clients alike, these efforts mark a turning point in the journey toward embracing blockchain for mainstream financial operations.

Photo: Freepik

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