4 trillion in tokenized securities by 2030, Citi estimates

The tokenization of the traditional finance offers a considerable potentialjudges the bank Citi. According to his assessments, the tokenized securities could represent 4000 billion dollars by 2030.

The pilot scheme recently came into force in Europe. It should contribute to the development of the tokenization of traditional assets. This prospect is attracting the interest of all the big names in finance.

According to Citithe economic potential of tokenized assets provides ample justification for this craze. In its March report to institutional investors, the bank therefore looks at the growth prospects of this market.

5 trillion dollars of digital currencies by 2030

Almost anything of value can be turned into chips [Ndlr : tokenisé] “, she recalls in her analysis. From a legal point of view, not all assets are eligible. The first initiatives are thus focused on securities.

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This category already offers an interesting outlook. Citi anticipates a jump in the tokenization in this area. According to its evaluation, the value of outstanding securities in the form of tokens could reach 4000 billion dollars by the end of the decade.

Citi also expects a surge in digital currencies in circulationestimating their value by 2030 to be 5000 billion dollars. Of these CBDCs, 50% would be related to distributed ledger technology.

For the head of Citi GPS (Global Perspectives & Solutions), Kathleen Boyle, tokenization remains emergingor at least still very far from the phase of mass adoption. In Europe, the pilot scheme began and allowed operations, but with limitations.

Mass adoption of blokchain within 6-8 years

While various financial groups are making tokenization a strategic focus, projects are still mainly in the experimental stage. Furthermore, the players must also agree on standards and enable smooth transactions on both the primary and secondary levels.

Kathleen Boyle nevertheless considers that the market is now approaching an inflection point.

Blockchain adoption will be successful when more than a billion users don’t even realize they are using the technology,” she argues.

These foundations require large-scale use cases beforehand. For Citi, the drivers of adoption are likely to be central bank digital currenciesthe tokenization of assets in gaming and payments on social networks.

While we thought mass adoption might still take six to eight years, the adoption momentum has shifted positively as governments, large institutions and businesses have moved from studying the benefits of tokenization to testing and proof of concept,” adds Kathleen Boyle.

French banks active on tokenization

From French banks confirm this assertion. We now consider that our ability to structure and issue financial securities in security token format is in production,” confided the CEO of SG-Forge, for example.

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The subsidiary of Société Générale has even started experiments on DeFi in 2022 to test the refinancing of tokens.

This year, the priority is industrialization and the ability to diversify into these refinancing themes via DeFi protocols. These are our shorter-term topics.”

BNP Paribas is also conducting developments around bond tokenization, such as with EDF ENR. But the group is also preparing the industrialization of digital asset custody. Its priority in 2023 is distribution.

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