Industry Insights: Digital Assets Continue Onward

Industry adoption of tokenisation is picking up the pace with the rise of on-chain money, maturation of technology, its growing adoption by Financial Market Infrastructures (FMIs) and the introduction of regulation.

A recent Citi Institute report, “Tokenization 2030: Wall Street On-Chain,” projects that the tokenised asset market could grow from $17 billion today to as much as $5.5 trillion by 2030.[1]

“Use cases for tokenisation are maturing,” shared Nadine Teychenne, Head of Tokenised Securities and Crypto, Citi Services. “Issuance is just the beginning. Once an asset is tokenised, you unlock a fundamentally different set of capabilities. The asset becomes programmable, insofar as it can carry embedded logic and be transferred in real-time,” she added.

Collateral Management

Perhaps the most immediate – and potent use case – for tokenisation is in collateral management, where the technology can facilitate intraday funding and the instantaneous mobilization of collateral to meet margin calls, noted Teychenne.

The economic benefits of mobilizing collateral more quickly via tokenisation are compelling. The ValueExchange estimates that tokenisation could release $4.8 billion of the roughly $36.8 billion in excess collateral held by tier 1 financial institutions with more than $100 billion in assets, increasing average annual interest earnings by $346 million.[2]

Eager to unlock these new revenue streams, 52% of firms told The ValueExchange that they expect to start using tokenised collateral in 2026.[3]

Treasury Management

Treasury management is emerging as another development area for tokenisation.

“Tokenised T-bills and short duration instruments are powering emerging on-chain money markets, repo markets and programmable cash management tools. Corporations and funds can deposit idle cash into yield-bearing tokenised instruments and redeem them instantly, a fundamental upgrade to treasury operations,” said Teychenne.

Corporate Actions

Other tangible applications include using smart contracts to automate corporate actions, a process synonymous with heavy lifting and manual intervention.

Done well, this could help reduce operational costs and eliminate reconciliation errors.

Democratizing Private Markets

Tokenisation could also transform private markets.

Despite more companies staying private for longer, private markets continue to have high barriers to entry and suffer from illiquidity and fragmented recordkeeping. Bringing private shares on-chain could broaden investor access to private markets beyond just the big institutions, whilst also addressing persistent challenges around transparency and liquidity.

“Tokenisation enables streamlined ownership transfers, reduced settlement friction, and a cleaner route for investors to hold private company shares alongside traditional assets,” commented Teychenne.

Case Study: Citi Launches the First Tokenised Depository Receipt (DR)

Citi introduced its market-first Digital DRs on private shares, offering global issuers and investors direct, transparent access to equity through a tokenised solution on a regulated blockchain infrastructure operated by SIX.

This innovation enhances private market access by providing a flexible, institutional-grade alternative that supports scale and reduces complexity and costs. It also marked the first time that a global financial services company is both issuing and acting as a custodian for tokenised depositary receipts representing private companies.[4]

Achieving Tokenisation at Scale: The Next Leg of the Journey

Tokenisation’s rollout has previously been held back by logistical barriers, but these obstacles are steadily being removed.

Bringing the Cash Leg On-Chain

First, tokenisation can only scale if the cash leg of the transaction is also on-chain.

Public stablecoins, whose issuance levels Citi expects to reach $1.9 trillion by 2030[5], alongside tokenised deposits and Central Bank Digital Currencies (CBDCs), are beginning to play an integral role in settling on-chain tokenised assets.

“There is not going to be a single on-chain instrument for the cash leg, so we shall see an ecosystem of stablecoins, tokenised deposits and CBDCs co-existing together. For large-scale institutional settlement, trust and regulatory certainty are key, which is why tokenised deposits or CBDCs are a natural starting point. This is effectively commercial bank money, but in a more efficient and programmable digital wrapper. This is the model for Citi Token Services,” explained Teychenne.

She added: “We are continuing to expand Citi Token Services, which allows us to move tokenised deposits around the world on an always-on, 24/7 basis. Today, our tokenised deposit capabilities are used by clients to support them with their liquidity and working capital management. We have already integrated this technology into our 24/7 USD Clearing solution, to create a bridge between blockchain and traditional payment networks for a multi-bank, always-on solution.”

FMIs Step Up to the Tokenisation Occasion

The infrastructure supporting tokenisation has also evolved, as leading FMIs, particularly in the US, begin integrating tokenisation capabilities into their core services.

In 2025, the Depository Trust & Clearing Corporation (DTCC) received approval from the US Securities and Exchange Commission (SEC) to offer tokenisation services for DTC-custodied assets.[6] They are not the only ones embracing tokenisation. Major exchanges are following suit, with the New York Stock Exchange (NYSE)[7] and Nasdaq[8] both currently developing digital platforms for trading tokenised securities.

“The industry is moving from bespoke, isolated experiments to interoperable, regulated market infrastructures,” said Teychenne.

Regulators Refine Their Tokenisation Approach

Where there was previously regulatory uncertainty about tokenisation, some progress is being made across most major markets, with indicative guidance coming through on legislation and regulatory direction

Teychenne said the industry must be pragmatic when dealing with divergences in global regulation. “It is vital that banks have a digital framework that can plug into different regulatory environments. It is also crucial firms lean on global banking partners. At Citi, we absorb the complexity of local rules, giving clients compliant access to multiple jurisdictions through a single integration,” she noted.

Progress is Happening, and We are Monitoring the Risks

Tokenisation may be entering the mainstream, but it is not without risks, and these are being closely tracked.

“Fragmentation risk is a problem, as there are multiple siloed blockchains, which creates liquidity traps. There is also a chasm between transparency and privacy in this new normal. Blockchains, by nature, are transparent, yet institutional finance is confidential, meaning client data cannot be exposed on shared ledgers,” said Teychenne.

Despite all the bullishness about 24/7 token trading, the operational reality is that many back offices still run off legacy technology and manual processing, a disconnect that needs to be fixed.

Tokenisation – What Does the Next Five Years Hold?

The use cases for tokenisation are now well documented, and the foundations for growth are steadily falling into place. On-chain cash settlement is gaining traction, FMIs are embedding tokenisation into their operating models, and there is greater regulatory clarity.

Challenges remain, particularly around interoperability, privacy, operational readiness and regulatory divergence. However, these are increasingly being treated not as reasons to pause, but as practical design considerations to be solved through industry collaboration, common standards and trusted institutional frameworks.

“Tokenisation’s journey may still be evolving, but its direction of travel is clear. Digital assets are moving from experimentation to execution and, increasingly, into the mainstream of institutional finance,” said Teychenne.

[1] Citi Institute – June 2026 – Tokenization 2030: Wall Street On-Chain

[2] The ValueExchange- Making the case for tokenised collateral

[3] The ValueExchange- Making the case for tokenised collateral

[4] Citi – June 11, 2026 - Citi launches market first tokenized depository receipts to connect private companies and investors

[5] Citi Institute- September 25, 2025 -  Stablecoins 2030: Web3 to Wall Street

[6] DTCC – May 4, 2026 – DTCC advances development of new tokenization service, convenes 50+ firms  to drive digital assets adoption

[7] ICE – January 19, 2026 – The New York Stock Exchange Develops tokenized securities platform

[8] Nasdaq – March 9, 2026 – Nasdaq to launch equity token design, putting issuers at the center of tokenization