Citi is working with 'some governments' to create digital currencies, says CEO

Michael Corbat, the outgoing CEO of Citigroup, has revealed that the bank is working with governments around the world to create digital currencies.

In an interview with Bloomberg on Friday, Corbat said: "I think that we will see in the not-too-distant future a sovereign, I wouldn't say crypto, digital currency coming out."

"We've been working with some governments around the world in terms of the creation and commercialization of them [digital currencies]. I think it's inevitable that they will be coming," said Corbat, without disclosing which governments.

When reached for comments, Danielle Romero Apsilos, Citi's managing director of communications, told The Block that "a number of central banks are running consultations on the subject of CBDC [central bank digital currencies] and Citi is actively participating in those consultations."

"As a significant practitioner in the payments market with connections to over 200 clearing systems, Citi is providing experience-based insights into the design choices involved in the formulation of digital currencies,” she said.

It is not the first time Corbat has predicted the future of CBDCs. In November 2017, he said: "It's likely that we're going to see governments introduce, not cryptocurrencies – I think cryptocurrency is a bad moniker for that – but a digital currency."

As for the future of cryptocurrencies, Corbat, in Friday's interview, said that that depends on a particular cryptocurrency's underlying nature.

"Some are stored value, some have been compared to modern-day gold, some have been compared to alternatives [...] some of these currencies will just be continued alternatives, continued different sources of payment that people can take advantage of based on the underlying nature of what they are," said Corbat.

Back in 2015, Citi had an idea of launching its own cryptocurrency called Citicoin for easier international transfers. But it scrapped the idea last year as other technologies proved to be more effective and efficient.

Recent reports have suggested that Citi is now looking to provide crypto custody services. Sources at Citi recently told The Block that the bank had conducted internal testing related to digital asset custody.

Corbat is leaving Citi in February 2021 after working for the bank for the last 38 years, of which the last eight as CEO. He is handing over the bank's reins to Jane Fraser, Citi's CEO of global consumer banking. Fraser will be the first woman to lead a major Wall Street bank.

Update: This story has been updated to include comments from Citi spokesperson Danielle Romero Apsilos