Citi Institute builds its forecast from penetration assumptions somewhat than a single top-down mannequin. The bottom case applies a small tokenized share to roughly $392 trillion of addressable belongings. For instance, Citi assumes 3% of the $86 trillion U.S. fairness market strikes onchain by 2030. That one assumption provides about $2.6 trillion, which equals practically half the complete. In the meantime, Citi assumes 10% of the $8 trillion Treasury invoice market tokenizes. It additionally assumes 5% of cash market funds observe, and these two items add roughly $1.4 trillion. In distinction, personal credit score, personal fairness and actual property funds collectively contribute solely about $400 billion.
The situations scale from that base. The bear case halves the base determine to $2.7 trillion. It displays slower regulation, weak interoperability and delayed institutional participation. The bull case multiplies the base by 1.5 to attain $8.2 trillion, assuming sooner rule-making and infrastructure buildout. At this time’s market seems to be tiny in opposition to these targets. Citi cites DefiLlama knowledge exhibiting about $17 billion in tokenized monetary belongings. That determine rose roughly threefold in a yr. Treasuries, bonds and cash market funds make up over 55% of it. Gold and commodities add about 34%. Notably, Citi nonetheless locations tokenization at only one.5 on a ten-point adoption curve.
🏛️ BREAKING: Citigroup studies tokenization has moved past pilot packages into core monetary infrastructure.
In a report launched in the present day, Citi initiatives tokenized belongings might attain $5.5 trillion by 2030, with a bull case of $8.2 trillion. https://t.co/3Bh8g2T5eR
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The place Citi Sits Amongst Different Forecasts
Outdoors estimates for 2030 fluctuate broadly. Citi lands in the middle of the range. McKinsey initiatives $1 trillion to $4 trillion, and Deutsche Financial institution Analysis initiatives $1.5 trillion to $2 trillion. On the different aspect, Roland Berger forecasts $10 trillion and ARK Make investments forecasts $11 trillion. Citi beforehand estimated $4 trillion to $5 trillion, so the new base case raises the midpoint modestly. Extra importantly, the combine has modified. Citi now expects public securities and liquid collateral to contribute extra. DTCC, NYSE and Nasdaq have introduced concrete initiatives. Personal markets, by comparability, stay illiquid and relationship-driven, so Citi expects them to scale slowly.
Why Collateral Is the First Sensible Use Case
A companion paper from Citi Providers explains why collateral issues a lot. It carries the title “The Digital Frontier: Collateral in a Tokenized World.” The authors argue that tokenization doesn’t create liquidity or alter an asset’s economics. As a substitute, it adjustments how rapidly and cheaply an eligible asset can transfer. Think about a Friday night variation margin name from a Tokyo counterparty. Underneath the conventional mannequin, the name stays open over the weekend. The supervisor both posts idle money or carries publicity till Monday. With a tokenized bond and a settlement token, each legs alternate at the similar second no matter market hours. Consequently, the money buffer that corporations maintain in opposition to timing gaps might shrink.
Citi identifies three particular adjustments for collateral managers. First, settlement stops ready for the clock, so corporations can pledge, substitute or recall belongings round the clock. Second, the eligible universe widens past money and authorities securities. A tokenized cash market fund share, for example, can preserve accruing yield whereas a supervisor pledges it. Third, collateral strikes throughout currencies and jurisdictions with a shared audit path somewhat than by way of correspondent chains. Eric Ilardi, Citi’s International Head of Collateral Administration for Investor Providers, put it plainly. “Tokenization just isn’t a separate initiative from collateral optimization. It’s the subsequent stage of it.”
Three Forces Behind the Shift From Pilots to Manufacturing
Citi factors to three converging forces. First, market infrastructure suppliers now construct tokenization into core workflows. DTCC obtained an SEC no-action letter in December 2025 for a three-year tokenization service. It started stay manufacturing trades in July. Reviews point out a full launch this month. Second, regulated onchain cash has arrived. Citi initiatives stablecoins might attain $1.9 trillion by 2030, and tokenized deposits add a bank-issued settlement possibility. Third, regulation has change into clearer, though the U.S. Readability Act nonetheless wanted a full Senate vote when Citi Institute revealed its report in June.
A Hybrid Section Earlier than Any Full Cutover
Citi doesn’t anticipate a clear break from legacy programs. Each papers describe a hybrid interval, and Citi Institute warns it might really feel messy. In the close to time period, conventional and tokenized rails run aspect by aspect for 12 to 24 months. In the meantime, eligible collateral schedules start to widen. Over the medium time period, tokenized stock connects to extra counterparties, custodians and settlement venues. Finally, corporations handle each sorts of collateral as one repeatedly optimized pool. Shoppers by no means see which rail carried a given motion. Importantly, Citi argues that corporations treating tokenization as a aspect experiment will find yourself operating two weak packages.
Dangers That Could Gradual the Forecast
Citi lists a number of constraints that would push outcomes towards the bear case. Atomic settlement is more durable to reverse than a conventional switch, so the surrounding controls have to be stronger. The Citi Providers paper requires 4 safeguards. These cowl institutional-grade key custody, unbiased evaluate of programmable logic, authorized certainty in every jurisdiction and a fallback to conventional rails. Tokenized cash market funds additionally face further friction. They rely on fund constructions and present infrastructure. Regulators additionally scrutinized the sector after the liquidity stresses of 2020 and 2023. Moreover, Citi stresses that tokenization doesn’t assure deep secondary markets or energetic market makers. Readers ought to due to this fact deal with the $5.5 trillion determine as a state of affairs constructed on acknowledged assumptions, not a prediction.
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