Citibank give up RMB cross-border payments, 600 billion “hard nut cake”

The | Xin Nan, Dave

Odaily produced | Daily Planet (ID:o-daily)

Citibank (NASDAQ: C) and ultimately gave up 4 years of brewing plans to send money.

A month ago, JP Morgan chase group rapid admission block chain, with nearly 200 banks launched a stable currency union eco JPMcoin plan , its purpose is to JPMcoin as its alliance in a clearing tool, to simplify cross-border payment and settlement process.

Rapid admission JP Morgan played all of their colleagues including Citibank be taken by surprise. The blockchain Fair for the largest commercial banks in the United States this admission set off a lively discussion, people think that this will set off the issuing bank or the tide.

However, Citibank act in a diametrically opposite way. In March 15th, news, Citibank abandoned the launch code named Citicoin encryption currency scheme .

There is speculation that Citibank is not given up the payment and settlement system with digital currency reform plan.

“To change a cross-border use block chain technology, payment network, we must let the banks around the world are involved.” Recently, Citi Innovation Lab responsible Gulru Atak explained the reason behind this move of citigroup.

But it did not give up the exploration of the blockchain, Gulru Atak said, will continue to try in trade finance.

3 months, Citibank secretly LinkedIn released “MI & Blockchain DLT | hiring Product Manager-VP” post, post content requirements of work in the field of block chain, distributed technology, digital assets etc..

Citibank, Citibank, which has been established for more than two hundred years of financial group, the test block chain was born only 10 years of technological innovation, which means, complex and inexplicable.

Strong competitors, how to block Citibank heavy chain journey?

4 Citicoin died and dormant

From the planned launch to finally died, Citicoin spent four years extremely lonely, no one knows.

In early 2015, Citigroup had announced plans to launch Citicoin, is located in Dublin’s Innovation Lab experiment.

For Ken Moore of Citigroup Innovation Laboratory (Ken Moor) said that in the past few years, Citi has been observed in the block chain technology, and has been created in the laboratory is equivalent to a bitcoin “technology project.

“Citi Citicoin is applying block chain technology in private equity transactions.” In 2017, Citigroup CEO Michael Corbat again Citicoin banner, still there is no water.

In fact, Citigroup’s entire block chain was low-key and subtle journey. But on the other side, his old rival Morgan JPMCoin is like a raging fire of datong.

In February 14th this year, JP Morgan announced the launch of its own encryption currency JPMCoin, hopes to simplify the process of encryption currency in global payments, many traditional financial institutions and industry chain block because in 2017, be taken by surprise, JP Morgan chase CEO Jamie Dimon also denounced bitcoin is fraud, even worse than the “Tulip bubble”.

“This is the main development of the first virtual currency bank.” Some analysts said, well-known financial oligarchs such as admission by the Morgan group has not only changed the traditional financial pattern, will also bring the blockchain prosperity.

The same day, JP Morgan chief Umar Farooq said the blockchain, now there have been 170 bank JP Morgan decided to cooperate.

Cai Weide, director of the Beihang University digital society and the blockchain laboratory in an interview with Babbitt said: “this represents a block chain financial empire will appear.”

“If today JP Morgan do not block chain system, tomorrow Citibank with this system, we have to go at.” Cai Weide said.

Citibank does not follow Morgan chase away, quietly give up Citicoin project.

“If you ask, I do not know at doing Citicoin.” One industry source said.

Compared to JP Morgan in the launch of the JPMcoin when the overwhelming media coverage and publicity, Citibank Citicoin reported a few.

In fact, JP Morgan and Citibank are set up nearly a hundred years of financial giant, Citibank was founded in 1812, is established in 1838 JP Morgan earlier 26, now at the end of the block chain financial disparity, it may miss relevant and conservative and citigroup.

Behind the giant

Citibank goes back to 1812 years, the original name for citibank. Citibank is the first American bank to operate business in Chinese, “Citi” two words are quite fantastic.

At the end of the Qing Dynasty in 1902, Citibank entered Chinese Shanghai, was formerly known as the city bank of New York (CitiBank), but as the first American “hanging red blue with a white flag of the foreign banks, the people of Shanghai will be known as the” Citi “, today the name has been retained in the present.

“Citi” is an American flag (flag) of the old saying, in Vietnam, is called the United States Citigroup now”. Including American noun are derived from this.

“Citi” perhaps behind the implication, Citibank has represented the United States, on behalf of the American financial group.

The fact also confirmed that. In 1894, Citibank has become the largest bank in the United states. 68 years later, Citibank 150th anniversary on the occasion of celebration, was briefly renamed “the first National City Bank (First National City Bank), first, countries show that Citibank’s strong position of vocabulary.

The company was founded more than 200 years of financial oligarchy also accompanied the rise of the American Empire, saw its global footprint take cities and seize territory.

As of the end of the 20 century, Citibank is still the largest bank in the United States.

Now, this position is occupied by now, JP Morgan, JP Morgan’s market capitalization to $390 billion 900 million in the global position. Citibank has a market value of $203 billion 100 million, long after Morgan chase, Bank of America, Wells Fargo Bank, HSBC holdings.

A century to occur several times of reincarnation.

The spring of 1935, a farm in the American state of Maine, Morgan was part of a consortium One divides into two., engaged in the business of commercial banks, the other part is split into the investment bank Morgan STANLEY (small mount).

After 74 years 2009 years, Citigroup had to make the same decision. 1 2009 13, Citigroup announced the release of a brokerage company and Smith Barney, a joint venture of Morgan Stanley Smith Barney and Morgan Stanley, which Morgan Stanley shares accounted for 51%.

2008 is very difficult year for Citibank, in addition to the experience of the financial crisis, Citigroup also made Japan shut down consumer finance branch act. In October 16, 2014, Citibank comprehensive exit in Japan to carry out personal business, the business school has become a lot of classic cases of failure.

In 2008, at a loss of $37 billion 500 million, becoming one of the most serious financial crisis hurt banks. From September 2008 to March 2009, Citibank’s share price fell sharply, from $20 per share to $0.97 per share, fell by 95% in the peak of 2006, Citigroup shares had reached $55.7 per share, the total market value of $2772.

If there is no U.S. government promptly shot, Citibank is likely to Lehman brothers and former U.S. investment bank with fourth dead.

11 2008 24, the US Treasury and the Federal Reserve Board and Federal Deposit Insurance Company Citigroup to inject 450 billion dollars, guarantee the Treasury and the federal deposit insurance, Citi mortgages, commercial real estate loans totaled 3060 billion dollars in debt. The U.S. government has jumped to 7.8% shares, Citigroup’s single largest shareholder.

2008 years, Citigroup has approximately 380 thousand employees worldwide, distributed in 106 countries, the number of employees more than bank of America 80%. 10 years later, Citigroup employees only 204 thousand.

Moreover, according to the financial times, 2018 Citigroup’s investment banking chief Jamie Forese said the plan for the next five years, cutting 8000 technology and management staff, which accounted for 40% of this kind of position.

“Obesity is difficult to control , this is the media of Citigroup that situation judgment.

Citigroup’s slogan in 2008 from the “Let’s get it done” (let us resolve the matter) to “Citi Never Sleeps” (never rest), there’s probably faint shows its defensive intention.

Now, Morgan often referred to as the Morgan group, Citigroup and has already upgraded but still people in Citibank.

Citibank has long occupied the top position in the global banking, according to the British “banker” magazine’s 2000 annual ranking, Citibank ranked first, Morgan ranked fifth, and in 2018, Morgan came in fifth, Citigroup fell in the eighth position.

Both of them have changed. “ J.P. world Morgan Construction Company like Citibank or chase away from ordinary world, with a leather, clock and burnished lamps to attract the rich flavonoids. ” Ron in the “Morgan” consortium penetration Nobel wrote in.

Today Citi picked up the block chain, is more like the blockchain redeem trip.

After issuing is undoubtedly a blow to Citi blockchain. One is Morgan chase JPMcoin carnival celebration, while Citicoin had to leave.

In this crisis, Citi why RMB? Why give up the RMB? These problems are a puzzle for the world.

For 600 billion of cross-border payments

Citicoin has witnessed Citigroup want cross-border payment and settlement market Fengeng banking ambitions.

In the traditional financial cross-border payment and settlement, SWIFT (Society for Worldwide Interbank Financial Telecommunication) almost occupy a monopoly position. In May 1973, in order to improve the international payment efficiency, from the United States, Canada and Europe 15 countries a total of 239 banks announced the establishment of SWIFT. At present, SWIFT users throughout the world more than 200 countries and regions, to provide services for more than 1.1 thousands of banks and other financial institutions.

But on the other side, SWIFT because of its low efficiency, long time, high cost disadvantage has been widely criticized. The high cost of cross-border remittance, the average remittance commitment fee of 7.68%, mainly due to the cost of bank transfer fees and SWIFT cable charges.

Cross-border payments is a big business. According to the World Bank report, 2018 years of global remittances is expected to grow to 616 billion 3.4% dollars.

As a bank in cross-border payments this block chain layout.

In February 24, 2017, China Merchants Bank announced that the bank has cross-border application block chain technology in global cash management in the field of direct liquidation, global account unified view and cross-border capital accumulation of the three scene.

In June 25, 2018, the Hongkong version of the Alipay AlipayHK online electronic wallet blockchain cross-border remittance services based on the user can block chain user to transfer technology to Philippines.

It is obviously do not want to miss this cross-border payment of billions of dollars of market. At present, Citibank global transfer business can solve global foreign currency accounts between Citi instant arrival, free of charge problem. But outside Citibank, cross-border payments is still to be cultivated in the market.

If Citicoin successfully issued, reconstruction of the field of payment and settlement, it will be a powerful weapon for Citibank overtaking.

In fact, the block chain layout of Citigroup than most banks earlier.

“We (in the blockchain) most of the efforts are concentrated in terms of payment, trade may be second.” Told international business times as early as 2015 years, Citibank innovation lab director Ken Moore had said.

But Citi’s increasingly conservative for the blockchain never seemed to fully grasp.

From the beginning of the Citicoin launch date, Citigroup almost never publicly detailed news about Citicoin. At the beginning of the launch of Citigroup, only vaguely disclosed, has constructed three block chain and a test run on the improvement of monetary payment and settlement business, and accumulated a skilled technical team “”.

And the members of the team who is team members, the number of key information, Citigroup has not made specific disclosure of foreign.

“Citi in block chain lack long-term vision, and Morgan in the JPMcoin before the launch, in advance to do a lot of downstream layout.” a source close to the daily planet Odaily so evaluation.

JP Morgan did much to radical and bold.

In 2016, JP Morgan and EthLab to launch their own private chain Quorum”. Based on Quorum, JP Morgan launched IIN payment platform between banks (Interbank Information Network).

In the original IIN scheme, there are more than 185 banks in the platform registration, while JPMcoin can directly fall in IIN, a IIN platform of more than 185 banks can use the currency of settlement.

A person close to JP Morgan who has commented: “ Morgan’s idea is very clear, the IIN network is built, and the platform in a large number of partners members will be more willing to use JPMcoin, the utility is better. But I don’t see Citicoin clarity.”

That is to say, Citibank announced to do Citicoin, did not give the Citicoin to expand more scenarios. Not even think about the block chain and Citicoin core competitive advantage exactly where.

At the beginning of 2015 Citigroup Citicoin disclosure, Citigroup Innovation Laboratory Manager Ken Moore also confirms this fact: “extensive work of digital payment and transaction involves five areas, block chain is just one of them…… The distributed technology, Citigroup did not consider 40 or 50 different companies, but will focus on the 4 to 5.”

To renounce the Citicoin plan, the interpretation of foreign speech innovation lab director Gulru Atak of Citigroup is to completely change a cross-border use block chain technology, payment network, we must let the banks around the world are involved.

2017 years, Citibank and Nasdaq to launch the “CitiConnect” program, designed to simplify the private securities payment, there are many similarities and JPMcoin. But there is too much noise.

Citi did not win the global bank, or even create their own ecological alliance.

If, in 2015, the biggest rival Citigroup blockchain journey but only SWIFT, and by 2019, the market has changed dramatically. Citibank in front of competitors, not only is SWIFT, and this rise slowly 4 years of digital currency, payment items and block chain ripple into the field of payment and settlement of JP Morgan JPMcoin.

Give up for Citi to send money for previous events, the blockchain expert Hong Shuning believes that in the same paradigm, the “second” challenge the “boss” is very difficult to succeed , if you want to pay the liquidation in Citi field force, only research such as coins and other digital currency a new paradigm to be successful in making the difference.

Even if the layout of JP Morgan late, was the first to establish the ecological system to draw out Citigroup, JP Morgan and participants alliance, the huge financial support and innovation ability based on Citigroup in the payment and settlement of first mover advantage but was beaten There is not much left.

One industry told the daily planet Odaily analysis, considering the market value of assets, etc., Citigroup and JP Morgan almost is not a echelon. In this bank issued currency competition, whether it is the industry’s appeal or their own strength, unmatched Citigroup JP Morgan.

“The basic currency is trust, fiat money is because there is a national fallback, and if the issuing bank, the bank will have a strong background as a support.” Insiders said above, trust in this point, it was nearly bankrupt than the strength of Morgan.

Citi’s second half chain block

Citibank give up to send money, “the future will certainly continue to explore the blockchain technology, especially in the scene” Application of trade financing more pragmatic innovation, Citi lab responsible Gulru Atak said.

“Give up the Citicoin plan, to do trade finance, means that Citigroup may recognize the SWIFT and JMPcoin status is difficult to shake, so do not want to spend too much effort to research in the field of payment and settlement, turn to JP Morgan chase and other banks also not involved in trade finance restructuring. ” insiders said.

In recent years, Citigroup in block chain strategy is to “look for the integration method of the existing system, conservative, lack of new ideas.

The daily planet Odaily according to publicly reported preliminary statistics show that in recent years, Citibank joined the Hyperledger, R3 block chain alliance, has invested in the blockchain company Symbiont, SETL, Axoni, dabbled in the field have custody, payment and settlement, trade financing, block chain technology development etc. .

Give up the renminbi after Citi’s journey blockchain officially entered the second half, which is the focus of trade finance.

According to Citigroup’s argument, it is continuing to trade financing possibilities in the test block chain, but is not yet ready to publicly announce any substantive content.

“This shows that Citigroup may lag behind some of its peers.” The view that analysis.

HSBC is regarded as one of the biggest rival after the transition. The daily planet Odaily data statistics show that HSBC’s 15 test block chain business, more than half are related to trade financing, and has been used.

In May 2018, HSBC Cargill group with blockchain Technology issued a credit certificate, using the block chain achieve the first trade financing agreement.

Subsequently, HSBC several times in the field of trade financing force, all branches were also explored on trade financing field of the chain block.

In July 2018, HSBC cooperation Hongkong Monetary Authority (HKMA), the establishment of trade financing platform based on block chain; in November 2018, India HSBC use block chain processing overseas trade; in January 2019, HSBC Malaysia branch and the Bank of Malaysia to promote the blockchain trade financing platform, HSBC Chinese joined the trade finance interbank trading block chain platform.

In addition to the traditional bank HSBC, current force in the field of trade finance as well as Japan’s MITSUBISHI UFJ Financial Group, UBS, etc.. Japan’s MITSUBISHI UFJ Financial Group has partnered with NTT to launch cross-border trade related verification data block chain concept; UBS and IBM to develop the blockchain trade financing platform Batavia.

In general, Citigroup is now turning to application of block chain in the field of trade finance, does not have the first mover advantage. To bend overtaking, Citigroup may also need more time to explore and create the explosion.

3 months, Citibank secretly LinkedIn released “MI & Blockchain DLT | hiring Product Manager-VP” post, post content requirements of work in the field of block chain, distributed technology, digital assets, place of work in New York. This position has been quietly off the assembly line in March 25th, a total of 45 applicants.

For Citibank has established more than 200 years, he left the journey the blockchain don’t have much time.

Reference material´╝Ü

“Citi, a British Empire yesterday, today and tomorrow”

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