First Abu Dhabi Bank has completed a live tokenized deposit transaction with Citi through Swift's Ledger platform.
The transaction was completed bilaterally with US-based Citi and validated the end-to-end interaction between existing Swift payment messaging, tokenized deposits, and distributed ledger infrastructure.
The Swift Ledger initiative is designed to reduce fragmentation across emerging tokenized money networks by providing an orchestration and interoperability layer. According to the companies, the transaction shows how regulated commercial bank money can support faster, programmable, and 24/7 cross-border payments. FAB's participation builds on its broader tokenized deposit strategy and its ongoing collaboration with Swift, regulators, and other industry partners.
Settlement structure keeps deposits on bank balance sheets
Throughout the transaction, tokenized deposits remained on the balance sheets of the participating banks. The Swift Ledger coordinated payment commitments and recorded corresponding interbank liabilities without taking custody of funds. Interbank settlement was kept separate from the ledger process and was completed through established correspondent banking channels, preserving the existing liquidity, risk management, and control frameworks used by the banks involved.
In addition, this structure reflects a broader approach within the industry to testing tokenization alongside, rather than in place of, existing settlement infrastructure. Through the process of keeping deposits on-balance-sheet and routing settlement through correspondent banking, the model aims to align new token-based payment mechanisms with the regulatory and risk frameworks that already govern cross-border transactions.
Next phases planned
FAB has said it will continue working with Swift and other participating institutions on subsequent phases of the initiative. These are expected to include expanded interoperability, 24/7 cross-border settlement capabilities, and programmable treasury solutions aimed at institutional and corporate clients.
Swift has been exploring the integration of distributed ledger technology with its existing messaging network as banks examine the tokenization of deposits and other assets. The Ledger MVP forms part of that exploration, testing how tokenized money can interoperate with existing correspondent banking rails. For FAB, the transaction represents a step toward positioning the bank within the wider development of tokenized deposit infrastructure across the Middle East and Africa region, alongside global banks such as Citi that are testing similar capabilities through the same initiative.
