Citigroup CEO Backs Tokenized Deposits, Says Too Much Focus on Stablecoins

Core Viewpoint - Citigroup's CEO Jane Fraser emphasizes that tokenized deposits will be the primary driver of future digital finance, rather than stablecoins [1][4]. Group 1: Client Needs and Solutions - Institutional clients are seeking seamless, real-time, low-cost cross-border payment solutions that are compliant [1]. - Fraser states that clients desire interoperable, multi-bank, always-on payment solutions, which are best achieved through tokenized deposits [2]. Group 2: Digital Asset Infrastructure - Citigroup has made significant investments in digital asset infrastructure, including a 24/7 U.S. dollar clearing network [2]. - The bank's tokenized services can connect to over 250 banks across more than 40 markets, allowing for instant fund transfers to suppliers and third parties [2]. Group 3: Challenges and Operational Friction - The main barrier to broader adoption of tokenized deposits is not technical but rather the readiness of corporate treasury departments for a 24/7 financial environment [2]. - While Citigroup supports stablecoins, Fraser highlights that they introduce more operational friction due to regulatory requirements such as anti-money laundering (AML) and tax reporting [3]. Group 4: Future of Tokenization - Fraser envisions tokenization extending beyond payments, with potential applications in the issuance and settlement of various assets like oil and equities on tokenized platforms [4]. - The regulatory environment is becoming more conducive to responsible innovation, which will aid market development [5].