Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Citi believes that the tokenization of financial and real-world assets on the blockchain platform would be a “killer use case” and could reach up to almost $4 trillion in value by 2030.
Blockchain technology and crypto assets are making inroads into mainstream finance very fast as financial giant Citi acknowledges the same. In its latest March report “Money, Tokens, and Games: Blockchain’s Next Billion Users and Trillions in Value,” Citi said that the industry is finally approaching an inflection point.
The banking giant stated that blockchain technology would very soon see “billions of users and trillions of dollars in value”. Kathleen Boyle, managing editor of the Citi GPS said:
“Successful adoption will be when blockchain has a billion-plus users who do not even realize they are using the technology”.
Interestingly, Boyle believes that central bank digital currencies (CBDCs) could prove to be catalyzing agents in speeding up the adoption. As we know central banks across the world have been working on blockchain-based CBDCs. These would be digital assets, but unlike Bitcoin and Ethereum, CBDCs shall be controlled by central banks and pegged to the respective national currencies.
During the Citi Digital Money Symposium on Thursday, the bank’s future finance lead Ronit Ghose suggested that $5 trillion worth of CBDCs will circulate in the global economy by 2030. He further added that “most of it will not be blockchain-based, but some of it will have blockchain interoperability or be DLT-specific.”
Along with CBDCs, Citi adds that tokenized assets and blockchain-based payments on social media would steer further crypto adoption. “Although we think mass adoption could still be six to eight years away, momentum on adoption has positively shifted as governments, large institutions, and corporations have moved from investigating the benefits of tokenization to trials and proofs of concept,” Boyle said.
Citi Bets on Tokenized Assets
Citi is quite bullish about tokenizing financial assets or real-world assets. The banking giant said that the tokenization of assets would establish a “killer use case”.
Tokenization helps to bring traditional financial assets onto blockchain and Citi believes that it would “grow by a factor of 80x in private markets and reach up to almost $4 trillion in value by 2030.”
Citi believes that tokenization could result in efficiencies across multiple areas such as a shared infrastructure, disintermediation within financial markets, and much more. Obviously, there are certain roadblocks that the industry needs to overcome as a whole. The first major roadblock is establishing regulatory clarity and a clear framework for getting traditional assets on-chain.
Citi is not the only player betting on the future of tokenization. BlackRock CEO Larry Fink shared a similar view in the annual letter to shareholders earlier this month. “In particular, the tokenization of asset classes offers the prospect of driving efficiencies in capital markets, shortening value chains, and improving cost and access for investors,” Fink said.