forex, currency funds can also SWAP? Citigroup joins hands with Fidelity to launch on-chain solution!

Citibank (Citi) and Fidelity Investments have jointly completed a concept verification of tokenization Money Market Fund (MMF) and digital foreign exchange (FX) technology, demonstrating the feasibility of real-time Settlement. This solution was first showcased at the 2024 Singapore Fintech Festival.

Fidelity and Citi collaborate to complete tokenization asset on-chain transactions

First, Fidelity and Citigroup built a digital swapping feature for a currency market fund, allowing investors to instantly settle tokenization MMF transactions, thereby improving asset management efficiency; In addition, this feature also allows investors to obtain higher returns on foreign currency funds. In simple terms, they use tokenization technology to achieve on-chain trading and cross-chain interaction transmission of MMF, thereby improving forex settlement and capital utilization efficiency.

Citigroup's global forex sales manager, Sam Hewson, said that with the evolution of tokenization technology in the asset market, investors may be able to trade foreign currencies and funds in different currencies and multiple blockchain networks in the future.

The foreign exchange market will provide global investors with a more efficient, high-Liquidity digital asset platform, and this innovation may also involve a broader range of asset custody, such as portfolio diversification and risk management.

Emma Pecenicic, Head of Digital Propositions and Partnerships for Asia Pacific at Fidelity, pointed out that Fidelity is committed to exploring the application of asset tokenization, with the goal of developing solutions that maximize capital efficiency and achieve financial inclusion.

MAS supports Citibank and Fidelity in the tokenization landing application in Singapore

The collaboration between Citibank and Fidelity is part of the Monetary Authority of Singapore (MAS) Project Guardian. As the 2024 Singapore Fintech Festival unfolds, the asset tokenization technology emphasized by Project Guardian is gradually being announced; and the Global Financial Telecommunications Association and Smart Contract platform Chainlink also jointly announced the pilot results of tokenization funds in the agenda.

Swift, Fidelity are both tokenization asset Settlement, what's the difference?

According to previous reports from the 'encryption City', the decentralized ledger DvP framework developed jointly by Swift and Chainlink allows banks or custodians to complete 'off-chain Settlement' of tokenized asset transactions for clients; Citigroup and Fidelity focus on developing 'on-chain Swapping' for tokenized funds or foreign currencies. The former focuses on seamless adoption in traditional finance (user-friendly), while the latter provides higher transparency for the buying and selling of tokenized assets, each with its own advantages. In any case, this series of technological changes is expected to be implemented in concrete landing applications by 2025, further eliminating the interaction barriers between TradFi and Decentralized Finance.