Key Takeaways:
- According to Citi, for the most conservative of its projections, tokenized assets could amount to $5.5 trillion by the year 2030.
- On-chain finance is progressing with great speed, driven by stablecoins, regulatory agreement and key exchange backing.
- DTCC, NYSE and Nasdaq are embedding tokenization into the core market infrastructure.
Wall Street’s shift toward using blockchain technology to power finance is gathering steam and Citi says it could change the economy’s capital markets in the next five years.
In its latest report, Tokenization 2030: Wall Street On-Chain, Citi projects the tokenized asset market could expand from roughly $17 billion today to $5.5 trillion by the end of the decade, with an upside scenario reaching $8.2 trillion.
Citi Sees Trillions Moving On-Chain
Citi says tokenization is getting ready to move out of beta.
The bank says that the next big growth period will be led by public market assets, particularly U.S. equities and Treasury bonds. Private market tokenization is still in fairly early stages, but liquid and traded assets are delivering the emergence of a logical stepping stone for blockchain adoption.
If only 10% of U.S. retail investors begin using on-chain investment solutions by 2030, in theory demand for tokenized public equities could exceed $2.7 trillion, Citi estimates.
The report states that younger, digitally-native investors are moving markets toward a new vision of people that trades on a global basis instead of during the typical market day, thereby losing the concept of time zones and opening up 12-hour trading days.
Read More: SEC’s Tokenized Stocks Push Could Shake Trillion-Dollar Exchanges, Research Warns
Stablecoins Become the Settlement Layer
One of the biggest motivations behind tokenization is the quick growth of regulated electronic cash.
By 2030, the stablecoin segment could expand to approximately $1.9 trillion, requiring the equivalent of the financial infrastructure for a Geneva branch to handle on-chain financial transactions and payments on the major platforms.
In contrast to past tokenization rounds, the market today has regulated stablecoins and tokenized deposits that offer the ability to make near instant settlement and Delivery-versus-Payment (DvP) transactions.
Tokenized Cash Solves a Critical Problem
Conventional on-chain tokenization projects had become problematic due to the traditional banking sector persisting behind the scenes.
Citi thinks that tokenized securities, with their increased capital efficiency and decreased settlement risk, plus tokenized cash make for a more comprehensive financial ecosystem.
Major Financial Institutions Are Joining the Shift
The report points out the increasing engagement by traditional market infrastructure providers.
Many entities, including DTCC, NYSE and Nasdaq, are stepping in to adopt tokenization for issuance, trading and settlement. Citi considers it to be a significant move from demo to production.
Read More: DTCC Targets $114T Tokenization Push With 50+ Firms, Eyes October 2026 Launch
Meanwhile, regulations are getting clearer in key jurisdictions. As the advancement of digital asset legislation continues in the U.S., including the passage of the CLARITY Act, uncertainty for those institutions mulling a financial product on blockchain beneficiaries is decreasing.
Citi also anticipates that a hybrid financial system will continue to dominate during the transition period. Tokenized assets and legacy platforms are not designed to take over the traditional markets immediately and will probably coexist until interoperability standards are developed.
