Citigroup, Inc., better known as just ‘Citi,’ is the 3rd largest US bank by assets, and the 13th largest in the world. Founded in 1812 and headquartered in Manhattan, Citi was one of the primary dealers of US Treasury securities up until the 2008 financial crisis. The recession took a heavy toll on the bank, requiring a bailout from the US government to stay afloat. Today, Citi is once again among the world’s largest financial services networks, spanning 140 countries with approximately 16,000 offices worldwide and holding over 200 million customer accounts in more than 140 countries.
This announcement was the first time a major bank admitted to working on its own altcoin. As one of the very banks Satoshi Nakamoto tried to replace with his invention, Citi took several years to warm up to Bitcoin. Thankfully, the bank seems to have seen the light and in July, Citi announced that it had been working on its own coin, dubbed “Citicoin,” in order to investigate distributed ledger technology for “the last few years.”
Citi’s somewhat antagonistic announcement mentioned that its dedicated team of cryptocurrency researchers has constructed at least three separate blockchains for the a currency to run across, although it’s still living in a purely pre-production environment.
Then, in September, the Venture Capital arm of Citigroup, Citi Ventures, became the major investor in a $30m USD equity funding round for a startup called Chain Inc., which primarily works on a blockchain-based interbank settlement ledger system things.
The Chain platform’s stated purpose is to enable existing banks and financial institutions to issue, create, transfer, and store digital assets on private networks that are purpose-built for given markets. These networks do not require the use of bitcoin as a currency, but are, in fact, based on the Bitcoin blockchain and protocol, intended for use on other open digital currency networks. Especially including networks of all of the Chain clients networked together on a permissioned-access blockchain.
Citi’s official reason for getting involved with Chain Inc. was stated as a way to test out the blockchain across a whole range of innovations. “Blockchain technology represents a fundamental, generational shift for financial services, and Chain’s platform is enabling and accelerating this transformation,” stated Ramneek Gupta, Managing Director of Global Venture Investing at Citi Ventures.
All of Chain’s investors will be meeting twice a year in what has been named the “Blockchain Working Group.” Meetings will be composed of the latest developments in distributed ledger technology.
“We hope to leverage Chain’s platform to rapidly test and develop applications as part of Citi’s multi-faceted blockchain strategy which has the potential to greatly enhance our customers’ experience well beyond just currencies and payments.” – Ramneek Gupta, Citi Ventures
A few days later at Consensus 2015, an afternoon session was held onstage with the global head at Citi’s Innovation Center, Debra Brackeen.
Brackeen talked about how Citi became involved in the blockchain and cryptocurrency space, stating that during her four or so years at the company, digital money had always been part of the conversation. Brackeen said, “We are looking at use cases including clearing and settlement and trade finance.”
What do you think about Citi’s venture into the digital currency space? Let us know in the comments below!