New Step in On-Chain Currency Clearing from Citi and Fidelity

Citi and Fidelity, the giant names of traditional finance (TradFi), have developed a proof-of-concept to offer a digital currency swap (FX swap) service in the on-chain money market fund (MMF).

The proof of concept, which will be unveiled at the Singapore Fintech Festival between November 6-8, will enable investors to execute multi-asset positions in real time. Additionally, the product will allow investors to earn higher returns from foreign cash funds. Investors will be able to diversify their portfolios by investing in MMFs in currencies other than the currencies they hold.

Citi and Fidelity developed the proof of concept as part of the Monetary Authority of Singapore (MAS) “Guardian Project,” which aims to develop common standards for tokenization.

Tokenization, which refers to the on-chain transaction of financial instruments as digital assets, continues to be a concept that attracts the attention of many traditional finance giants in order to increase the efficiency of global financial markets.

For example, while transactions between assets priced in different currencies normally take a few days, thanks to tokenization, these assets can be realized simultaneously. Citi and Fidelity are also trying to demonstrate this with the proof of concept they developed.