Topic: Citi Has Scrapped Its Plan for a JPM Coin-Like Bank-Backed Cryptocurrency (Read 230 times)

If the Citi Bank came inside the crypto industry they might be one of the top crypto banking provider as now but they announced about adoption over crypto currency on 2015 but till this time nothing happens from their side.
Now plan with JPM how come we should believe it.

Just another click-bait article.

Anyways, as majority have said, this so called planned of CITI has nothing to do with crypto currency whatsoever. This so called coins will be for their own used, within their ecosystem.

But you have to admire those banks though, they really need to update and re-invent themselves because most of their systems are already old and obsolete. And now trying to take advantage of the latest technology - blockchain.

Exactly. so when a centralized authority have full control over the nodes and the development, they have the power to determine the value of the coin. Just image buying a coin for $300 today, when there are a supply cap of say 1 000 000 CitiCoins and the next day, the Bank order the developers to raise the supply cap to 10 000 000 coins. Your $300 coins will automatically lose it's value, because the scarcity was decreased by a significant amount.

In Bitcoin, no centralized authority can make that decision and you need public consensus to mess with those parameters. 

To be completely frank, I still struggle to see why this news is relevant to the decentralised cryptocurrency space.

Even if Citi was to adopt some sort of blockchain technology, they will be doing so in order to streamline their own transaction processing facilities and processes. The entire system will always be in the control of the bank, its value will most likely come from fractional reserve banking, as opposed to bitcoin which is decentralised.

Thus, there is no difference to this on a fundamental level compared to the current electronic payment processing that is currently in banks. If Citibank decides to invest, good for them, it may lead to long term benefits. But if they don't, it won't affect anything that current decentralised cryptocurrencies already do.

What you don't know is that these type of huge companies do not scrap anything away forever, they just bank it in in some storage and just hide it there until they change their minds about it.

All the paper work all the work all the manhour went into this project is not for nothing, they will keep it safe somewhere until they say "hey we had blockchain project as well what happened to it" and than it will resurface and they will keep working on it again. That is how these huge companies sort of become huge because they know what to do and exactly when to do it, sort of going with the trend, they are never too early nor too late to anything, they do it exactly when they need to and even if they are a bit late somehow government bails them out so they are fine with being a bit behind, they want to see what happens to the first one that does this and than if the results are better than expected they follow them.

Change is inevitable. Sooner or later they will have to implement what crypto transaction has to offer. Banks are way too slow to make an interbank transaction and they should implement in their system what crypto eco-system have.

Agreed, now cross border transactions were happening through bitcoin. Already there were more banking coins that are developed for inter banking services. Bankcoins will also get value if they're operated as a separate channel than collaborating with banking services. Because when it's is combined with banking it automatically goes as a centralized platform which again benefits the venture and not the users.

BankCoins are doomed for failure. I think SWIFT will eventually partner up with a Crypto currency/Blockchain based technology partner, like R3 Banking group to improve their in-house legacy systems and all these other Bankcoins will be rendered worthless in a matter of days.

This will not influence Bitcoin, because inter Bank settlements are not done with Bitcoin at the moment. The only cross border payments are direct Bitcoin transfers and some remittance services. 

Got to agree, but also development and use of the technology is a positive at least in parallel to us I would guess.   However its not really relevant to crypto as we know it because its just like XRP with value all in favour of the central body.    I imagine there would be benefits if many companies did operate block chains, scales of economy somehow lowering costs perhaps even though the chain itself is not related and is still FIAT

The banking system is the main layer that will always be slow and expensive. They can scale it to provide everyone cheap and instant money transfers, but what's left of their profits if they do so?

They will offer layer two or three type of services where people can get the benefits up to a certain degree, but still depend on the main layer representing the foundation of the banking system. If you think about it, it's very similar to Bitcoin on and off chain, where the main difference is that Bitcoin can't scale endlessly on-chain, while banks can scale the main layer, but don't want to in order to not lose a massive chunk of their profits.

With or without them, the life of crypto will continue. They are not the only company in this world that people rely onto. And yes, sooner or later, they will adopt this system, otherwise, they will become obsolete. Who knows, all the published stuffs are just for media coverage but the real thing is totally opposite?

We dont really care at all - A line for Crypto users against these things.

As expected for banks to adopt yet they would eye for systems that being created nor backed by traditional investors and JPM coin is suited out for that criteria.So im not really shocked at all.

Banks don't need to create a new ecosystem, they already have one that just need to be adapted. Yes it has propably a huge cost but there is a good ROI to make with. Banks won't have the choice, they will have to adapt new technologies or they will lose audience. They know it

These bank coins are not even tradeable on the exchanges so it's just an internal way for bankers to shift their money around. Even shitcoin sv is a bigger threat than this

Well, as I thought there would be nothing related to current crypytocurrencies. Bank is trying to use crypto in order to get an advantage in competition with the other banks. That's gonna be a stablecoin that will not be related with the other cryptocurrencies.
Good news for the ones who thought that banks gonna steal money from other cryptos and  centralize it: that's not gonna happen.

Good for Citi for actually thinking of the use-case rather than just jumping in on the train without actually having to test the waters blindly and hoping that the niche would generate them more income. While I applaud the Citi group for not taking in on the hype, I hope they move from one insecure technology to another, or perhaps strengthen their payments network in order to prevent losses for the users and make the fees somewhat lower than what it already is. JP Morgan might be the pioneers of banking institutions using blockchain payments due to them abusing the fact that almost everyone is still in awe with the blockchain tech, but I don't think it will be easy for them to build a network of banks to use such tech. After all, JP Morgan seems to just create their own crypto and not really focus on bettering the playing field for everyone.

What significance it holds in crypto market?? None!!

Citi scrapped plan for a bank owned crypto is not a big news for the community. Sooner or later they will also move towards such implementation because digital payment system is the future. Slowly all banks will have to move to such eco system.

But these digital currencies will just be digital currencies and not cryptocurrencies. Values of these currencies will be strictly regulated and normal banking processes will apply on those! Not a big news and soon we will see more banks either to implement or scrap plans to implement such initiative! Crypto community would remain unaffected!

In light of the splash JPMorgan made recently with its plan for a bank-backed cryptocurrency, it’s worth remembering another big institution first tested a token to connect global payments – back in 2015.

Codenamed “Citicoin,” the project out of Citigroup’s innovation lab in Dublin was never formally announced by the bank, even as a proof of concept. The idea was to streamline global payment processes. As such, there are obvious parallels with the much-vaunted JPM Coin.

However, having taken stock of the experiment (not to mention the scorn of the bitcoin community at that time) Citi concluded that, while the technology has the potential to live up to its promises, there were other more effective and efficient ways of making improvements in payments.

That’s according to Citi’s current innovation lab chief, Gulru Atak, global head of innovation for treasury and trade solutions (TTS). Regarding the crypto experiments of her predecessors, she told CoinDesk:

    “Based on our learnings from that experiment we actually decided to make meaningful improvements in the existing rails by leveraging the payments ecosystem and within that ecosystem, we are considering the fintechs as well or the regulators around the world as well, including SWIFT.”

Taking a measured step back, Atak said when it comes to improving cross-border payments, the bank is looking at effective methods but with a shorter-term impact. “We are trying to make those changes today, rather than just putting all our efforts into future technology,” she said.

After all, to completely change a cross-border payment network with blockchain-enabled technology, one would have to on-board all the world’s banks, Atak said, adding:

    “If we are talking about cross border payments, how many banks do we have across the world – and how many of them are already on-boarded on SWIFT? And how long has it taken SWIFT to onboard all those banks?”

As such, Citi’s blockchain strategy in recent years has been about finding ways to integrate legacy systems, said Atak, citing the bank’s 2017 partnership with Nasdaq, CitiConnect, designed to streamline payments around private securities. That project, she said, also has parallels with JPM Coin.

“[CitiConnect] didn’t issue stablecoins but the infrastructure that was used was similar to issuing coins on a blockchain platform,” Atak said. “But it was purely to integrate into a blockchain-enabled system on our client’s end and make it connect to our legacy payment processes real-time.”


From trade finance to FX

While Atak was happy to reflect on previous blockchain initiatives, she also pointed out that Citi certainly continues to explore blockchain, especially in areas like trade finance.

This niche is a more realistic use case, she said, because building an ecosystem for trade finance doesn’t require as many banks as a full-blown cross-border payments system. “Our focus is currently more in the trade space and trade finance and trade letters of credit. We are experimenting with this technology but probably we are a little bit, like, reserved when it comes to making bold public announcements.”

Rival global bank HSBC is not so shy about beating its chest. In January, HSBC announced it had settled $250 billion of foreign exchange (FX) trades using a blockchain over the past year. 

Regarding FX, Opeyemi Olomo, blockchain lead from Citi’s Innovation Lab, said there are clear pain points in that market, which has issues around credit transparency. As with global payments, the question of whether to apply blockchain comes down to building an ecosystem and how onerous that process would be in relation to the benefit.

Olomo agreed there is an opportunity. 

“There is a niche ecosystem and if you look at liquidity providers in the FX space, the major liquidity providers are not that many. So that’s an ecosystem where you could maybe think of it and have like five or six together and you can start actually creating a difference,” he said.

Broadly speaking, Atak said many industries are pushing hard to move existing instruments to a blockchain-enabled platform without necessarily thinking why that instrument exists from the very beginning.

Instead, a close examination of the very nature of financial instruments might be required, she said. “For example, how did a human being come up with a banking instrument called a letter of credit? What were the issues that led to its creation?”

This philosophical approach will guide Citi’s thinking, Atak added, concluding:

    “I am challenging ourselves as well: are we looking to this technology to its best potential or are we just trying to get rid of the current friction and operational inefficiency in the system?


Reference: https://www.coindesk.com/citi-scraps-its-plan-for-a-jpm-coin-like-bank-backed-cryptocurrency