Citi Expands Token Services into Japan, Raising Questions about Stablecoin Adoption

Citi's expansion of its blockchain-based Token Services into Japan has introduced an alternative to stablecoin adoption for institutional clients.

The service allows eligible clients in Japan to move US dollars around the clock using tokenized bank deposits, giving them another route for cross-border payments without requiring them to hold or redeem stablecoins.

This development comes as Japanese banks and companies are building their own stablecoins for similar payment uses, with MUFG, SMBC, and Mizuho targeting live transactions by March 2027. However, Citi's tokenized deposits retain uses beyond its network, including retail payments, public blockchain transfers, and digital asset settlement.