A tenth of the global post-trade market turnover is expected to be handled through stablecoins and tokenized securities in less than five years, according to a survey by Citi.
The investment bank said in a Securities Services Evolution report released on Tuesday that bank-issued stablecoins were seen as the main method to support collateral efficiency, fund tokenization and private market securities.
The report polled 537 custodians, banks, broker-dealers, asset managers and institutional investors in the Americas, Europe, Asia Pacific and the Middle East between June and July, where over half reporting their firms are also piloting generative artificial intelligence (GenAI) for post-trades.
The post-trade market ensures securities trades are verified, executed and finalized, and comes as Wall Street has taken a liking to stablecoins after the US passed laws earlier this year regulating the tokens.
Crypto industry nearing tipping point
Citi said in its report that since 2021, the adoption of digital assets has progressed from early experimentation to strategic implementation, and while the “momentum was clear,” the industry has yet to hit a tipping point, but the bank predicts it could be “tantalizingly close.”
“After years of groundwork, the global post-trade industry looks set for a period of transformation in speed, cost and resilience on an international scale.”
Survey respondents marked liquidity and post-trade cost efficiencies as the key drivers of investments into digital ledger technology (DLT), with a majority citing the areas as being significantly impacted by blockchain in the next three years.
“More than half of the survey’s respondents are clearer than ever that the ability of DLT to increase the velocity of securities around the world’s capital markets can have major impacts on their funding costs, financial resource requirements and operating costs before 2028,” Citi said.
Some countries expect crypto to handle more turnover
The expectations on digital asset growth were higher in the US, with 14% of all market turnovers predicted to be conducted using digital or tokenized assets…
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