Citi forecasts the tokenized securities market could reach $5.5 trillion by 2030, driven by major players and stablecoin growth.
Citi has projected a significant expansion in the tokenized securities market, estimating it could grow to $5.5 trillion by the year 2030. The financial giant's report indicates that the current market, valued at approximately $17 billion, could experience varied growth depending on adoption rates, with estimates ranging from $2.7 trillion to as high as $8.2 trillion.
Key Drivers of Growth
The report highlights three main factors contributing to this anticipated growth. Firstly, major market players like the Depository Trust & Clearing Corporation (DTCC) and Nasdaq are actively incorporating tokenization into their trading systems. DTCC plans to start limited production trades of tokenized securities in July, with a full rollout expected by October. Nasdaq is also working on a framework for blockchain-based share issuance, aiming for a possible launch in 2027.
Secondly, the rise of stablecoins is set to facilitate the immediate settlement of trades, with projections suggesting the stablecoin market could reach $1.9 trillion by 2030. This growth is expected to create a demand for around $1 trillion in U.S. Treasury bills as stablecoin issuers back their currencies with actual bonds.
Lastly, regulatory advancements in the U.S. are paving the way for clearer digital asset legislation, which could bolster the market significantly. The Senate Banking Committee has recently moved forward with the Clarity Act, signaling progress in regulatory clarity.
Market Dynamics
Citi anticipates that the tokenization trend will primarily impact mainstream public markets, such as U.S. stocks and government bonds, rather than private markets, which typically evolve at a slower pace. By 2030, the bank expects that about 10% of the U.S. Treasury bill market and 3% of the public stock market will be tokenized. A shift of just 10% of average U.S. investors to these digital platforms could generate an additional $2.6 trillion in demand for digital stocks.
The report also draws a parallel to the gradual adoption of electronic toll systems, suggesting that the transition to tokenization will be incremental, requiring both traditional and new financial systems to coexist for a while. This evolution will favor large financial institutions that can seamlessly integrate both asset management and digital payment systems.
