First Abu Dhabi Bank and Citi complete live tokenized-deposit settlement on Swift’s Ledger
The bilateral USD transaction is the first of its kind for a Middle East or Africa bank, using distributed ledger technology to coordinate payments while deposits stay on each bank’s own balance sheet.
First Abu Dhabi Bank and Citi completed a live, bilateral U.S. dollar transaction using tokenized deposits through Swift's Ledger minimum viable product, the banks said, with FAB describing itself as the first bank in the Middle East and Africa to reach that milestone.
A tokenized deposit represents a bank customer's existing deposit as a digital token that can move and settle faster than a conventional wire, without the deposit itself leaving the issuing bank's balance sheet. In this transaction, distributed ledger technology served as a coordination layer between FAB and Citi — synchronizing the payment commitment between the two banks — while final settlement still ran through established correspondent banking channels rather than replacing them.
Swift, the cooperative that operates the messaging network underlying most cross-border bank transfers, has been piloting the Ledger platform with a group of banks as a way to let tokenized and conventional payment rails interoperate rather than fragmenting into separate, incompatible systems. The stated aim of the approach is to allow for 24/7 cross-border settlement capability without discarding the risk-management and liquidity frameworks banks already run under existing correspondent relationships.
The transaction is a proof-of-concept demonstration between two banks rather than a production service available to customers, and neither bank disclosed a timeline for when tokenized-deposit settlement of this kind might move beyond pilot transactions into routine use. Its significance is more about establishing that the mechanism works between two major banks across the Gulf and U.S. corridors than about any immediate change to how their customers move money today.