Citi Securities Services Evolution 2025

Securities Services Evolution 2025 | 23 Figure 10: Anticipated market volumes using tokenized or digital securities by 2030 Approximately 10% of market turnover is expected to be digital in five years Figure 11: The fastest growing asset classes From tokenized equities to private assets to fixed income Collateral Experiment” and the ECB’s Eurosystem DLT trials) have demonstrated, increased velocity means improvedutilization, faster redeployment and a reduced cost of risk. For existing collateral types, this translates to reduced (overnight) funding costs, improved riskweightedasset provisions (RWA) and better liquidity ratios (LCR). It also implies that new assets (suchas equities andeven crypto-currencies) canbeusedas collateral, adding further enhancement tobalance sheets across theworld. Mobilitymeansmoney and this iswhy business heads andmarket infrastructures (suchas Eurex 16 , LCH 17 , CME 18 and ICE 19 ) are nowengaging inaccelerating the deployment of digital assets as quickly as possible. Equally in the tokenized funds space (the second fastest-growing asset class in our survey), the same theme applies. Here, velocity means faster subscriptions into funds by investors, reduced error rates and then the ability tomobilize fund units themselves (as pledged or sellable units). Today an investor can wait three days to subscribe into a mutual fund , only to then have to wait a further three days when they want to redeem their cash to fund another investment. Through a growing range of tokenized funds (offered by Blackrock in the US 20 , UBS in Singapore 21 or China AMC 22 in Hong Kong, for example) an investor could instantly subscribe to a fund and then pledge or sell that fund unit (as collateral or even as a cash equivalent) – avoiding the cost of funds being tied up and idle for extensive periods. Asmarket leaders across American, European and Asian fund domiciles continue to evidence these benefits in practice (gathering over USD6 billion in AUM in just over one year 23 ), the funding opportunity from tokenized funds ismaterial enough tomake it the second fastest growing asset class for respondents, in the run up to 2030 (Figure 11). This is about muchmore than an incremental saving in operations – it is about multi-billion-dollar balance sheet transformation. Question: Looking at digital assets/tokenization of assets, where do you think the fastest growth is going to be by 2030 – and in which venues? Please select your fastest growing asset types and their venues. Expressed as: ranked top choice, YoY. Question: What percentage of market turnover do you expect to be done using tokenized or natively digital securities by 2030? Expressed as: % of respondents’ market turnover expectations using tokenized or natively digital securities by 2030, by region and category. North America Average expected % of turnover expected to be done using tokenized or digital securities by 2030 (by region) APAC Europe Latin America 14% 10% 9% 2% in digital asset turnover by 2030* USD16 trillion Private assets trading Fixed income trading 14% 9% Equities trading 10% OTC collateral Derivatives trading 11% 9% Funds trading CCP margining 10% 9% Tokenization of equities 69% Crypto-currencies 18% Tokenization of private/ alternative assets 12% Tokenization of fixed income 0% Native issuance of new securities 0% Tokenization of funds 0% Tokenization of private/ alternative assets 33% Crypto-currencies 26% Tokenization of equities 16% Tokenization of fixed income 14% Native issuance of new securities 10% Tokenization of funds 0% Tokenization of fixed income 18% Crypto-currencies 17% Tokenization of funds 17% Tokenization of private/ alternative assets 17% Native issuance of new securities 16% Tokenization of equities 16% #1 2023 2024 2025 #1 #1 Source: the ValueExchange