- Citi’s digital assets head Ryan Rugg said that the bank is currently using a permissioned Ethereum blockchain due to regulatory reasons.
- Rugg noted that the bank would switch to a public blockchain if regulators allowed it.
- Ripple CTO suggested that banks could leverage Xrapid to facilitate crypto transactions.
Citi Bank is currently using a permissioned version of the Ethereum blockchain, according to Ryan Rugg, head of digital assets. On September 20, digital asset researcher Anderson tweeted a video of Rugg’s interview with CNBC. When asked about a potential future where Citi implements a public blockchain, Rugg responded that it depends on the regulatory laws.
Rugg noted that at the moment, banks are only allowed to be on permission chains. However, if the regulators get comfortable with public blockchain in the future, Citi might make a switch. Additionally, Rugg pointed out that the regulations across countries also differ, which is another thing that the banks have to take into consideration before moving to public blockchains.
In the CNBC interview, Rugg said there are numerous legislations in the market regarding stablecoins. Hence, Citi has already built a platform on an ERC-20, EVM-compatible protocol. Rugg mentioned that if regulatory bills were passed and their clients wanted to start using crypto, Citi would be able to facilitate that.
Anders’ video also featured a second part where Ripple’s CTO David Schwartz discusses banks’ hesitation to use digital assets due to regulatory challenges. However, many banks don’t want to pre-fund or wait business days for a confirmation. Therefore, Schwartz suggested,
[These clients] can have an Xrapid customer, which probably won’t be a bank, but a financial institution, that uses some digital asset to buy [a foreign currency] as an internal treasury function, and offers the amount to the bank.
Moreover, during his interview with CB Insights, Schwartz explained that XRapid, a liquidity solution for banks that use Ripple’s XRP as a bridge currency, is particularly useful for remittance flows where the cost is high and for banks that don’t want to touch digital assets due to regulatory challenges. He mentioned that XRapid allows for quick and efficient transactions, reducing the volatility risk associated with holding assets for extended periods.
Anders acknowledges the points provided by both the industry experts and pitches the cross-border payments platform, Tranglo, as a solution. A few days ago, Tranglo shared that since 2008, the company has experienced a consistent year-on-year increase of 20% in partnerships. It attributed this growth and Tranglo’s global expansion to a number of collaborations including Ripple.
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