Investment banking group Citi’s newly appointed head of core cash management for Asia-Pacific, Morgan McKenney, said that the key to the mainstream adoption of Blockchain technology is the introduction of state-backed virtual currencies. She added that the ultimate success of distributed ledger technology relies on the use of fiat currencies issued on a Blockchain.

McKenney also talked about the bank’s CitiConnect Blockchain project. The project aims to resolve the liquidity issues in the private securities market by leveraging the technology from Blockchain startup company Chain. She said that to fully unlock the project’s potential, virtual currencies are the most ideal payment method.

McKenney also discussed how atomic swaps can be further empowered if any number of cryptocurrency assets could be bought with a Blockchain-based fiat currency.

"If you had a digital dollar, if you had a digital pound, exactly fungible with the note in your wallet and the dollar in your bank account, then you'd be willing to use that digital currency much more throughout your ongoing daily transactions."

Other Citi projects/investments

According to McKenney, the bank has also pursued other projects aside from exploring other possible collaboration opportunities for its CitiConnect platform. Among these projects are the investments made in several Blockchain startups, namely, Chain, Digital Asset Holdings, and Axoni.

All the companies offer Blockchain solutions that don’t include a native digital currency.

She also added that the bank is currently not interested in advancing projects to explore a virtual currency outside of state-backed digital currency, it remains open for that possibility in the future.

 “I wouldn’t want to make statement that we’re explicitly ruling out anything, but we’re taking a strategic approach that reflects the earlier stage of Blockchain versus some other technologies.”