Two major global financial institutions, Citi and Société Générale, are driving blockchain initiatives with innovative solutions aimed at modernizing traditional banking systems. Representatives from both organizations who spoke at Benzinga's “Future of Digital Assets” event highlighted their companies' progress in tokenization and digital finance. These efforts reflect growing efforts to leverage blockchain technology to improve the efficiency, transparency, and scalability of financial services.
Citi unveils tokenized digital cash system
Citi has introduced a tokenized deposit solution, branded Citi Digital Cash, that facilitates the movement of cash between branches between the US and Singapore. This live operational system is designed to streamline transactions within the bank's network and ensure faster and more efficient internal cash transfers.
Citi emphasized that the integration of digital solutions and traditional financial frameworks is essential to meet the growing demand for access to both traditional and digital assets. By launching Citi Digital Cash, the agency is establishing itself as a leader in infrastructure modernization while complying with regulatory requirements. The bank believes that integrating digital tokenization into its internal processes is a step towards improving customer experience and increasing transaction efficiency.
Societe Generale launches Euro stablecoin on Ethereum
Societe Generale, through its digital asset subsidiary SG Forge, has issued a euro-denominated stablecoin designed to run on the Ethereum blockchain. Stablecoins are compliant with the European Union's Market for Cryptoassets (MiCA) regulations, making them a compliant and secure digital payment solution.
The bank built SG Forge as an independent surrounding organization to ensure operational flexibility while maintaining compliance with comprehensive governance standards. This approach reflects a broader trend among financial institutions to separate digital asset operations from core banking functions to foster growth and innovation.
Societe Generale believes that the issuance of MiCA-compliant stablecoins represents an important development in digital finance, providing a scalable and reliable alternative for cross-border transactions and payments on public blockchains.
The growing role of tokenization in banking
Both Citi and Société Générale highlighted the transformative potential of blockchain, particularly through tokenization. Citi noted that the programmability inherent in blockchain technology enables preset conditions and automated workflows, greatly increasing transparency and reducing operational inefficiencies.
Tokenization of assets and transactions not only increases speed, but also provides financial institutions with new tools to optimize processes, enabling real-time settlements and better liquidity management. For Societe Generale, the successful implementation of a public blockchain-based stablecoin demonstrated how digital finance can effectively operate within a highly regulated environment.
Challenges in blockchain integration
Although both banks have made considerable progress, the integration of blockchain into traditional finance is not without its challenges. Regulatory ambiguity remains one of the biggest hurdles as financial institutions await further clarity from financial authorities. Société Générale stressed that regulators are still adapting to blockchain technology, which is slowing widespread adoption.
The lack of a regulatory framework that fully embraces blockchain also limits its application in certain processes. For example, key regulations, such as those related to transfer agents, have not yet recognized blockchain as a definitive source of truth for transactions, resulting in continued reliance on traditional methods.
Citi further noted the importance of ensuring interoperability between blockchain systems and existing financial networks. Overcoming this challenge and achieving scalability for blockchain applications requires collaboration between financial institutions and technology providers.
The future of digital finance
The advances made by Citi and Société Générale signify a broader shift to blockchain-driven solutions in the financial industry. These efforts highlight the potential of blockchain to restructure banking processes, reduce costs, and improve transparency while maintaining compliance in regulated markets.
As blockchain technology evolves, financial institutions will play a pivotal role in integrating digital assets into the mainstream financial system. For customers and businesses, these innovations mark the beginning of a more interconnected and efficient financial ecosystem driven by automation, tokenization, and secure digital solutions.
Citi and Société Générale are focused on delivering practical, compliant, and scalable blockchain solutions to explore how traditional banking can adapt to and benefit from blockchain technology. We are taking the lead in proving this. Their work is not only transforming internal processes, but also setting the stage for broader adoption of digital assets across the financial sector.
