Citi's Exploration Into Crypto and the Metaverse

We're coming to you from the Coin Desk podcast studio presented by Bito, founded in 2013 with the first institutional grade Bitcoin wallet. Bit Go is the gold standard in custody staking and settlement today. Bito supports over 800 coins and processes 20% of all Bitcoin transactions by value, check them out at Bit go.com. Consensus is so fun for me because we get to bring people together from different worlds who are building totally different things in this space. We are gonna welcome Ryan Ru to the show. She's the head of digital assets for Citibank. She joins now. OK. We have Citibank and we have the metaverse, right? I know a few years ago we saw like some banks doing metaverse activa activations Citibank have any desires to get into a metaverse and try something out. You know, we've experimented, we did a simulation of our lobby for clients to come in and use and like so they could touch and feel, I think from a client experience, it's still a little bit far away. Like as we saw when you're in your opening segment, it still has a little bit of bugs that you know, we move trillions of dollars a day. We can't have those bugs just yet. So, um, but our clients are interested for everything from client on boarding to experiences. But I think it still has a little bit of a way to go from a technology standpoint. How many people tried it out? Oh, several clients were walking by and like loving and it's always really amusing watching clients. It's almost like Children because they're like, like, you know, trying to feel and touch. So, um I definitely think it has a place but not quite yet in financial services. Justin, does it take big names like Citibank to have maybe IRL activations that introduce people to it to help achieve this mainstream adoption that you're thinking about? Does there need to be some kind of cooper there? Yeah, I think so. I mean, I love to hear that you guys are dabbling and experimenting there and I think it just kind of comes back to the previous point that, you know, we need really, really high quality experiences and then we need the hardware and structure to support a really seamless experience as well. But yeah, absolutely agree. I think it takes a lot of big names, it takes big brands um to introduce these experiences to their audience and consumers to take. Um and, and we'll get more massive option that way. So I love that you were trying that out. Awesome, Justin. Thank you so much. For joining the show, Ryan turning to you now, Citibank is here at consensus. We've been asking everyone what their experience has been like so far. What's your experience been like from a banking perspective? You know, it's been great. And I think back to like my original consensus in 2016 in New York, we were like the Marriott and I think the theme was uh making it real or making Tokens real. And here we are eight years later. And like, finally, like, you know, I'm at a large enterprise launching city Token services, a commercial product that our clients are using. So it's been a, it's been journey to get to this point and it is great to see all these people here last night, I sat next to real money allocators. So there's like, I feel like we've seen a transition in this space from more of, you know, fintech, experimenting to more enterprises entering. And it's exciting to be here and see this. No, you know, which we speak of the metaverse. That's the, that's the cryptos effort to turn that. That's, that's cryptos effort to create a digital worlds. Um On the other side, we have real world assets where crypto is taking real estate, uh treasuries, all these different sorts of assets and putting them on chain, making them more transferable. Uh what is Citibank doing in this sector? So we started with cash, you know, tokenized deposits because if you think about it. That's the most simplistic asset. You know, I started with tokenizing everything from mortgages IP real estate from my fintech days. You know, I worked at a start up for five years and then I went to a large G si we, we did everything but if you can't actually move cash, the fiat on ledger, the actually settlement leg of it, like it doesn't really make sense. So that's where we started and it's a er C money token. So in the future, if regulation changes and it is permission for us to tokenize other assets, we have those rails built out, but we did start with cash um tokenize deposits and that's, you know, a pain point for our clients, right? You know, you have cut off times, you have, you know, if it's 5 p.m. in New York, it's 5 a.m. in Singapore, which you typically couldn't move money. Now it's frictionless now you can move money 24 7 regardless of bank holidays, cut off periods. And it really adds a lot of advantages to our clients. We talked to Kai Sheffield from Visa earlier about what's going on internally. What are the conversations that are happening internally when it comes to experimenting in this industry? Talk to us about that at Citibank. Has your team grown out over the past few years as a trunk is there? Uh internal tension. What's it like? Yeah, it's definitely grown, you know, I've been there a year and a half. So a testament to Citibank, they hired on myself who came from, you know, a technology background to come in to actually build these platforms. So we've been hiring talent and we continue to do that. You know, our strategy is build by partner. You know, we're not gonna build everything internally. We're gonna partner with some of the best fintech out there. We're gonna invest in them as well. Like we've been doing that since 2016 and continue to do that. So I think that's, you know, our strategy going forward. You know, I also think that it's a lot of education that goes on, not just internally but externally. You know, we're a highly regulated institution and we don't operate in that gray area. So we work very closely with our regulators to make sure that everything we do is safety and soundness of our clients is, is the focus so much of the activity right now in crypto is around stuff that I don't think Citibank will ever touch like meme coins and Joe cryptocurrencies platforms that allow anyone to make a token and, and sell it. Uh It, it, there's a lot of bad ideas. Some of those bad ideas are also scams, but a lot, all that stuff, I don't think city would ever touch. How is the but they still exist. How is the presence of those things changing the conversation around how cities approaching this is it making it more difficult to advocate for Cryptocurrency in the ways that city knows it to be, you know, useful on a broad scale. Yeah. Right now, from a regulatory standpoint, it's not permission for us to hold crypto. Right. So until that changes, we continue to keep an eye on the market and experiment and the work we have, you know, innovation lab, it does great work working with a lot of fintech out there. But until that regulation changes and like it has just to be clear that gray area, large financial institutions are not gonna operate in. And I think, you know, here this week, it's been really positive hearing from a lot of the senators and legislators out there talking about the changes that are coming. But until that is 100% clear, we just won't operate in that area. We spoke earlier, like I said with Visa Sky Sheffield about Stablecoins. I know that you spoke on a panel yesterday called We Cash Has to Dash fast payments through tokenization and Stablecoins. Talk to us a little bit about how you're looking at stablecoins, how you're looking to implement that into banking operations uh as you move forward. So stable coins are really interesting, you know, I mean, if you if I think about my career journey and the evolution to where we've gotten in stable coins, you know, you started out with Cryptocurrency, but it was so volatile that it wasn't actually good for payments and what are stablecoins trying to, to solve? Right, 24 7 frictionless commerce to match, kind of like the digital economy that we have, which I think City Token Services does a lot of. Right. Again, it's only an internal solution. Right now. We are working with several entities externally looking at how we connect but to permission change. So it all goes back to for us regulation, right? If it's permissible for us to hold and move stable coins by regulators, then we'll look at that. But if it's gray area, we're not gonna do it. So, but again, we built out these rails that in the future, if it changes, we can potentially be able to do that. Now, we are here at consensus. We have been talking to everyone about the things that they are most excited about what they hope to leave here with from um I guess like an institutional perspective, what do you hope to leave here with? I think it would be a little bit different than some of the start ups that we speak to. Well, I always love talking to the start ups, like having worked at a start up for over five years, hearing like the best and brightest and what they're trying to work on and do that. I could actually bring back the city first and foremost, like it's really interesting some of these technologies that are coming out and like, again, thinking back to 2016 to where we are today, the technology has come a long way, a really long way. So that's really exciting to do. But also talking to the institutional clients, there's a lot of institutional clients here that are interested in what we're doing and like on board and like programmable money and talking about the way of the future and like, you know, we have all these, you know, operation and risk management systems in place. But you know, if we can automate some of that to streamline for our clients or like I can reduce my operation risk, I can reduce my liquidity buffer. So like this is huge. So I think talking to the institutions also and hearing their interests and appetite to, you know, on board to City Token Services has been really exciting also, what kind of questions are your clients asking about crypto? Well, I mean, it depends what client you're talking about and from an investment standpoint, I get asked and I'm like, listen, I'm like, I'm not a financial advisor. I said on the payment side of the city that is not part of my purview about what we're doing, but also about like what are the future use cases? Where are you seeing this going to your point? What other real world assets are we gonna be able to on board? Are we gonna be able to do atomic settlement DVP in the future? Like where is this all going like automated po portfolio management. You know, all that is where our institutional clients are focused is the focus right now solely on Ethereum for the pavement space or are you looking at other chains as well? Oh, we're looking at other chains as well. That's where we started. It's not public, that's where we started. Um But I mean, there's a lot of other chains out there that are advancing from a technology standpoint that are really interesting to us that we're experimenting with also. No, this is a bit of an in the weeds question. But do you have a perspective on the the viability of a layer two networks? Is that something that city is thinking about whether these networks that are being built to make Ethereum to iterate on a theory and have it a little faster, a little cheaper? Is that something that city is interested in or is it more interested in just a ba base layers exclusively like the Solano of the world that aren't uh utilizing more centralizing technologies? No, we're definitely looking at layer two layers two as well for the kind of efficiencies and scalability of them. But again, for us, a lot of it's going to depend on how regulation shakes out in this space and like is it permission for us to connect to public chains? Because right now it's not. So, you know, all the work that we've done are on private permission versions of Ethereum um but even like connecting externally, like we worked with the fed on the regulated liability network, like we don't want to create a silo token that, that kind of defeats the purpose of a Blockchain, right? That, that's not what we're trying to do. But again, we have to operate within the swim lanes that we have to really create a scalable solution. And if you think about large enterprises like city, like safety and soundness of our clients like is first and foremost. And unless, unless we can like 100% prove that we're not gonna do that, we have to go through all the KYC sanction AM L like nothing that we've built circumvent any of that. If anything, we've added additional scrutiny to it because of its emerging tech to make sure that it's, you know, safe for our clients, Brian. Thanks so much for joining the set this morning and we hope you enjoy the rest of the conference. Thank you so much for having me. I really appreciate it.