Bank-Issued Stablecoins Tipped as Key Enabler of Tokenization

Bank-issued stablecoins are set to become the central enabler of securities tokenization and digital asset adoption, according to Citi.

The ‘Securities Services Evolution’ report predicts that by 2030, 10% of market turnover will be conducted using digital assets and tokenized securities.

Stablecoins, particularly those issued by banks, are emerging as the preferred mechanism for delivering the right balance of automation, regulation, and liquidity.

Citi highlights their role in enabling real-time mobility of collateral, supporting fund tokenization, and unlocking access to private market securities — key use cases expected to lead in 2025.

After years of debate centered on central bank digital currencies (CBDCs), the report notes that the landscape in 2025 looks more diversified. Bank-issued stablecoins, tokenized deposits, and digital payment solutions such as Fnality have become operational, while tokenized money market funds are increasingly being explored as units of value transfer.

Although CBDCs and money market funds are most widely used today, each by around 18% of respondents to Citi’s survey, no single mechanism is expected to dominate.

Instead, firms are selecting different forms of digital money for specific functions, from collateral management to exchange trading.

The divergence also reflects differing priorities across market participants. While 61% of custodians and 46% of banks are focused on balance sheet efficiencies, such as liquidity improvements and reduced overnight lines, 67% of buy-side clients are primarily seeking automation and operational gains.

Looking ahead, Citi expects bank-issued stablecoins and cryptocurrencies to be the fastest-growing forms of digital money for securities payments by 2030. Stablecoins, in particular, stand out for their ability to meet the needs of both buyers and sellers across the trade life cycle, offering automation, risk reduction, and balance sheet benefits, according to the report.