Citi Securities Services Evolution 2025

26 | Securities Services Evolution 2025 Digital Money: Automation or Balance Sheet efficiency? What form of digital money will support this new industry model? After years of demanding only central bank digital currencies (CBDC), firms have focused strongly on new forms of digital money in 2025 – with bank issued stablecoins, tokenized deposits and digital payment mechanisms (such as Fnality) all becoming operational in the last year. In addition, exploration continues on the use of tokenized money market funds (as a unit of value transfer), driven by strong demand from all profiles of firms. In this context, whilst CBDC and money market funds are most used today (as indicated by 18% of respondents respectively), our survey results suggest that no single mechanism is set to dominate – particularly given that they all have different uses for different functions. Money market funds are ostensibly preferred for exchange trading (by 19% of respondents), whereas CBDCs are preferred for margining and collateral management, for example. This continuing use of multiple forms of digital money is underpinned by differences in exactly what firms are looking to use digital money for and the benefits they hope to realize. Whilst 61% of custodian respondents and 46% of banks are looking to use digital money to realize new, balance sheet efficiencies (including increased mobility and reductions in overnight lines, improvements in LCR, etc.), up to 67% of their buy-side clients are looking for automation benefits and operational efficiencies (Figure 15). And can one single mechanism deliver against this wide range of requirements? By 2030, bank-issued stablecoins and crypto-currencies look set to be the fastest growing forms of digital money (for on-exchange securities payments), with the former most desirable in North America and the latter most applicable in Asia Pacific. This is largely due to the fact that bank-issued stablecoins offer the most equal range of benefits to the various parties across the trade life cycle – delivering both automation, risk reduction, mobility and balance sheet efficiencies. (Figure 16) Given that the central role of digital cash is to serve both buyers and sellers, this ability to serve both constituencies appears to be a key benefit of stablecoins for the near future.