"Tokenization's Quiet Revolution: How Custodians Will Reshape Finance by 2030"

Citigroup forecasts a significant rise in tokenized transactions by 2030, with 10% of global market turnover expected to be conducted using digital assets and tokenized securities. This projection underscores the growing influence of digital assets in financial systems and highlights the role of innovations such as bank-issued stablecoins in enabling this transformation [5].

The firm’s “Securities Services Evolution” whitepaper emphasizes the convergence of digital and traditional assets, with custodians expected to play a pivotal role in securities tokenization by 2030. The whitepaper also highlights the importance of automation, especially in the UK and Europe, for the successful implementation of T+1 settlement systems [5]. In this context, 76% of respondents from a survey of 537 industry leaders are actively engaged in T+1 initiatives in 2025, while 48% continue to optimize internal processes for North American T+1 settlements.

In parallel, the adoption of generative artificial intelligence (GenAI) is also gaining traction in post-trade operations. The report states that 86% of respondents are piloting GenAI in their operations, with client onboarding as a primary use case. Moreover, 57% of respondents are specifically piloting GenAI for post-trade functions, led by buy-side firms. Institutional investors are particularly active in this space, with 67% using GenAI for post-trade reconciliation and reporting [5].

The Asia Pacific region is identified as a leader in digital asset adoption, driven by robust retail cryptocurrency uptake and proactive regulatory efforts. The region is advancing digital asset projects into deployment, setting the stage for broader global adoption [5]. Citigroup’s whitepaper also highlights the importance of extending investor protections to tokenized securities markets. These protections, rooted in existing broker-dealer and custody frameworks, are crucial for maintaining investor confidence and ensuring the long-term success of tokenized markets. The whitepaper calls for consistent definitions and regulatory approaches to classify digital assets based on their economic characteristics, rather than their technological form [6].

In a related development, the U.S. securities markets are undergoing modernization to accommodate new technologies such as blockchain and tokenization. This process involves the careful consideration of investor protections, including market transparency, best execution, and conflict-of-interest mitigation. A regulatory sandbox or innovation exemption framework is proposed as a supplement to broader regulatory modernization, allowing firms to test new products and business models in a controlled environment while maintaining investor safeguards [6].

The whitepaper further emphasizes the need for a clear transition path from temporary regulatory exemptions to a permanent, well-defined regime. This includes setting limits on investor pools, transaction volumes, and the duration of exemptions to prevent regulatory arbitrage and market fragmentation. The process must also ensure transparency and public input to maintain trust and accountability [6].

The convergence of digital assets and traditional financial systems is reshaping global capital markets. Citigroup's insights highlight the importance of balancing innovation with investor protections, regulatory clarity, and operational efficiency. As the adoption of digital assets and tokenized securities continues to grow, the role of financial institutions in facilitating this transition will become increasingly critical.

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