First Foreign Bank to Bring Tokenized Deposits to Japan Citigroup is preparing to deploy a blockchain-based cross-border payment service for Japanese corporate clients before the end of 2026.
Citigroup is preparing to deploy a blockchain-based cross-border payment service for Japanese corporate clients before the end of 2026. The move will make Citigroup the first foreign bank to offer tokenized deposit-based remittances in Japan.Shamil Karik, the bank's global head of services, confirmed the plan in an interview with Japan's Nikkei newspaper.
Tokenized deposits are digital representations of traditional bank deposits on a blockchain, allowing immediate, verifiable transfers that bypass slower conventional settlement cycles. For Japanese companies, the practical shift is significant: foreign-currency transfers become available in real time, 24 hours a day and 365 days a year, dissolving the business-day and holiday windows that constrain conventional wires.
The service targets Japanese companies with international operations and will initially support cross-border payments across five countries.Leveraging a private, permissioned blockchain, the solution is designed to help eliminate traditional cut-off times and geographical restrictions.
Cross-border payments have traditionally involved multiple financial institutions, settlement processes, and messaging systems before funds reach the recipient, and depending on the countries and currencies involved, these transactions can take additional time and may require businesses to manage several stages of processing. Citi's tokenized infrastructure is built to cut through that friction directly.
Citigroup moves roughly $6 trillion in funds across its network every day, and transfers executed through tokenized deposits already reach about $1 billion daily, evidence the technology has graduated from pilot stage to production inside one of the world's largest custodian banks.
By offering a regulated institutional alternative to stablecoin rails, Citigroup positions tokenized deposits as a viable infrastructure upgrade for corporate treasury operations. The Japan rollout also fits a broader expansion strategy: the service is already live in key financial hubs including the US, UK, Singapore, and Hong Kong, with plans for further market expansion.
The move comes as banks and financial institutions worldwide investigate practical applications for blockchain beyond cryptocurrency markets, with real-time settlement, tokenized assets, and cross-border payments emerging as areas where distributed ledger technology could reduce friction and improve transaction efficiency.
Sources:Nikkei Asia: Citi to offer instant cross-border payments for Japan firms via blockchainCitigroup: Citi Unveils Strategic Expansion of Citi Token ServicesCOINOTAG: Citigroup Challenges Stablecoin Rails With Tokenized Deposit Remittances in Japan
