tl;dr
Citigroup CEO Jane Fraser highlights tokenized deposits as the next big thing in finance, positioning them as a superior alternative to stablecoins for seamless, compliant cross-border transactions. The article explores Citi's infrastructure, regulatory focus, and vision for tokenization beyond paym...
**Citigroup’s Jane Fraser: Tokenized Deposits, Not Stablecoins, to Drive Future of Finance**
In a recent investor call following Citigroup’s third-quarter earnings, CEO Jane Fraser outlined a bold vision for the future of finance, positioning **tokenized deposits** as the cornerstone of next-generation payments and financial infrastructure. While stablecoins have dominated headlines, Fraser emphasized that institutional clients are increasingly seeking seamless, real-time cross-border transactions that are both cost-effective and compliant—and she believes tokenized deposits are the answer.
**Meeting Client Demand with Tokenized Solutions**
Fraser highlighted that institutional clients are demanding “interoperable, multi-bank, always-on payment solutions” that balance speed, security, and regulatory compliance. Tokenized deposits, she argued, offer a superior alternative to stablecoins, which, despite their popularity, come with significant operational complexities.
Citi has invested heavily in digital asset infrastructure, including its 24/7 U.S. dollar clearing network. The bank’s tokenized services now connect over 250 financial institutions across 40 markets, enabling instant fund transfers to suppliers and third parties. However, Fraser noted that the biggest hurdle to widespread adoption isn’t technical but rather the readiness of corporate treasury departments to operate in a 24/7 financial environment.
**Stablecoins: Support Without Overhyping**
While Citi will continue to support stablecoins—providing on/off ramps, custodial services, and cash management for stablecoin providers—Fraser cautioned against overemphasizing their role. She pointed to the regulatory and operational burdens associated with stablecoins, including anti-money laundering (AML) compliance, tax reporting, and accounting challenges. “Tokenized deposit capabilities avoid these issues,” she said, underscoring their efficiency.
Fraser also addressed the possibility of Citi issuing its own stablecoin, but she urged caution. “There’s an overfocus on stablecoin at the moment,” she said. “Most of this is going to get solved by tokenized deposit capabilities.”
**Beyond Payments: The Broader Vision of Tokenization**
Looking ahead, Fraser envisions tokenization transforming more than just payments. She sees a future where the issuance and settlement of assets—from oil to equities—occur on tokenized rails within a regulated, trusted framework. “The key is that regulators are beginning to enable responsible innovation,” she said.
Citi aims to play a central role in this evolution, leveraging its infrastructure to provide tools for a more efficient financial ecosystem. “It’s terrific that regulators are now letting us innovate in a responsible way. That will really help the development of the market,” Fraser added.
**The Road Ahead**
As the financial industry grapples with the challenges of digital transformation, Fraser’s focus on tokenized deposits reflects a strategic shift toward solutions that prioritize compliance, scalability, and interoperability. While stablecoins remain a part of the landscape, Citi’s emphasis on tokenized deposits signals a long-term commitment to redefining how value is moved and managed in a global economy.
In an era of rapid innovation, Fraser’s message is clear: the future of finance isn’t about chasing trends, but building resilient, regulated systems that meet the evolving needs of clients.