Ronit Ghose, Head of Future of Finance. Citi Institute |
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New technology tends to follow a familiar pattern: we overestimate its impact in the short run and underestimate it in the long run. Blockchain should be no different.
But this time, the scale could be extraordinary. By 2030, tokenized bank deposits—digital versions of insured money—could support $100-140 trillion in annual flows, rivaling or even surpassing stablecoins, according to Citi Institute’s latest projections in our recent report Stablecoins 2030: Web3 to Wall Street.
Stablecoins sit at the center of what we have called blockchain’s “ChatGPT moment” for finance. In 2025, adoption has surged, with global issuance climbing to about $300 billion, up around 50 percent year to date. Citi Institute’s latest projections see circulation reaching $1.9 trillion by 2030 under a base case, and as high as $4.0 trillion in a bullish scenario.
Yet while stablecoins power digital-asset ecosystems, banks have been quietly building their own on-chain formats. Bank tokens (including tokenized deposits and deposit tokens) could represent insured bank deposits in programmable on-chain digital form. While stablecoins have catalyzed the shift to always-on money, banks are well positioned to handle even greater transaction volumes with tokenized deposits.
Several factors explain why tokenized deposits may play a defining role in the evolution of digital finance.
Regulatory Trust and Client Confidence
In finance, technology may change—but confidence remains the foundation. In a world of increasing regulatory scrutiny, trust is currency.
Stablecoins rely on issuers’ ability to maintain transparent, fully-backed reserves. But history shows that confidence can erode quickly when questions arise about asset quality or redemption risk.
Bank tokens start from a stronger base. They represent direct claims on regulated deposits—protected by banking law, supervision, and deposit insurance. They operate within established frameworks for liquidity, capital, and compliance, giving corporates assurance that their digital balances meet the same standards as traditional funds.
For institutional treasurers, confidence matters. Counterparty risk is lower, oversight is clearer, and the asset aligns with internal risk-management and accounting policies. As on-chain finance matures, those attributes may prove decisive in driving adoption.
Seamless Integration with Existing Systems
Innovation doesn’t always mean disruption. Often, it’s about evolution—new rails forming alongside old ones. And that’s how finance usually changes: not with a bang, but by wiring the new into the old.
One of the key advantages of tokenized deposits is that they fit within existing financial architecture. As the Stablecoins 2030 report notes, bank tokens “do not require entirely new plumbing.” They can plug directly into treasury, ERP, and payment workflows, enabling programmable settlement, automated liquidity management, and 24×7 transfers—all within familiar infrastructure.
Stablecoins, by contrast, typically operate on public blockchains. Converting between fiat and tokenized balances can involve additional steps such as on- and off-ramps and reconciliation. Tokenized deposits remove much of that friction. They marry the speed and automation of blockchain with the compliance and accounting simplicity of bank money. As Derek Green of Payoneer observed on a recent Citi Institute podcast, the early advantage may not just be faster payments—it’s what he calls “speed of transparency.” Knowing where your funds are, even over weekends or holidays, can be as valuable as instant settlement itself.
Privacy and Compliance Alignment
Public blockchains are powerful—but sometimes too transparent. Few corporates want supplier terms, pricing, or payroll data visible on a public ledger.
Bank tokens solve for this through design. They typically operate on private or permissioned ledgers that maintain transaction confidentiality while embedding compliance at the point of transaction. This approach bridges two priorities that once seemed at odds: regulatory visibility and data privacy. Enterprises can transact securely and programmatically, while regulators retain the auditability needed to ensure integrity. It’s how banking’s trust layer meets technology’s logic layer—one of those rare occasions when regulation and innovation actually reinforce each other.
Scale, Liquidity, and Interoperability
Scale may be the decisive factor in the coming decade. Global large-value payment systems processed roughly $1.7 quadrillion in 20231. If even five percent of that volume migrates to tokenized form by 2030, that would imply bank tokens could process $100 trillion in annual transactions—surpassing stablecoins’ projected c$100 trillion range2, calculated at fiat payment velocity over time (base case).
The liquidity foundation already exists. Major banks routinely move $5-10 trillion per day through established rails3. Even a modest shift of those flows onto tokenized ledgers would eclipse the entire stablecoin market.
And this won’t be a walled garden. As my Citi colleague Ryan Rugg put it, clients don’t want “siloed tokens.” They want multi-bank, multi-asset, multi-border connectivity. Interoperability isn’t a technical feature—it’s the network effect that makes these systems useful. Just like the early internet, its power grows with every new participant.
Stablecoins and Bank Tokens: Distinct Paths, Shared Purpose
In Stablecoins 2030, we argue that on-chain money will be plural. The future of finance won’t be defined by a single format but by multiple forms of digital value serving different needs.
Stablecoins will thrive in crypto-native ecosystems, cross-border e-commerce, and emerging-market payments. They offer global, dollar-denominated liquidity in places where banking access is limited. For FinTechs, developers, and retail users, they provide a bridge between digital assets and everyday commerce. Bank tokens will anchor institutional and corporate flows—trade settlement, treasury, and tokenized assets—where compliance, auditability, and integration with existing systems are paramount. Both formats share the same goals: faster settlement, lower costs, and programmable functionality. Their strengths differ—one is built for openness, the other for regulation—but together they underpin the next generation of digital money.
By 2030, Citi projects:
- Stablecoin issuance: $0.9 trillion (bear), $1.9 trillion (base), $4 trillion (bull)
- Stablecoin transaction volume: ≈ 45 trillion (bear), 95-200 trillion (base & bull, ≈ 50× velocity)
- Bank-token transaction volume: $100-140 trillion (≈ 5 percent of large-value payments
Ultimately, stablecoins and bank tokens will appeal to different user groups but advance the same technological frontier. Together, they are set to define the broadband era of blockchain finance—faster, smarter, and more interoperable—transforming liquidity management and settlement across markets.
The Citi Institute’s Stablecoins 2030 report envisions a financial system where on-chain and traditional money co-evolve. For corporates and institutions, the next decade will be less about replacing banks and more about re-engineering money itself—combining the regulatory trust of insured deposits with the efficiency of digital tokens.
The future of finance will not hinge on disruption alone. It will depend on integration at scale—where the safety of the banking system meets the speed of blockchain to create a truly programmable, global financial network.
1Stablecoins 2030: Page 26
2 Citi Institute
3 J.P.Morgan Payments Newsroom, "Silent Night: Behind the Scenes of Peak Payments Season," 28 July 2025