2026 Perspectives for the Public Sector

For the public sector, this represents both a milestone and an invitation: to help set up the rules that will govern the market and to prepare new ways of operating in it. Recent Citi research has highlighted the growing importance of this shift. In Stablecoins 2030: Web3 to Wall Street , 1 Citi underscored that stablecoins and tokenized deposits could form an important part of tomorrow’s payments landscape, provided they are governed by clear and consistent standards. Recent market forecasts by Citi suggest that the stablecoin market could potentially reach as much as $4 trillion by 2030, up from earlier estimates, reflecting rapid adoption across both private and public sectors. These numbers illustrate the immense scale of transformation underway and reflect the robust regulatory considerations that likely await. As stablecoins gain momentum, it is important to recognize that they are not all built equally. Differences in reserve backing, regulatory compliance, audit transparency, and technological infrastructure can significantly impact their risk profile and suitability for enterprise use. The choice of blockchain also plays a role, affecting settlement speed, cost, and scalability. For institutions, evaluating these factors is essential when considering stablecoin adoption for payments, treasury operations, or on-chain settlement. While stablecoins often grab headlines, another, quieter, transformative innovation is tokenized deposits. Just as the world of finance has moved from paper checks to digital banking, tokenized deposits represent that next phase — always on, programmable assets. Tokenized deposits are not speculative assets; they are not pegged to dollars held by an external issuer. They represent commercial bank money, typically backed by deposits and governed under existing bank regulatory frameworks, and are designed to integrate into the existing banking system. Stablecoins and tokenized deposits have demonstrated howmoney can move faster and at lower cost. Yet today, these instruments exist within limited legal frameworks that make it difficult to scale them 1 https://www.citigroup.com/rcs/citigpa/storage/public/GPS_Report_Stablecoins_2030.pdf 2 https://apps.citi.net/rcs/citigpa/storage/public/GPS_Report_Blockchain_Digital_Dollar.pdf Public disbursements, such as benefits or disaster relief, could be delivered through digital wallets, reducing administrative bottlenecks, and enabling recipients to access funds more quickly and securely, while potentially improving transparency and accountability. across markets. The GENIUS Act is an important step toward establishing consistent federal standards on issuance, reserves, and oversight. While details will evolve, the direction is clear: digital assets are becoming regulated financial instruments, with direct implications for governments, treasuries, and multilateral institutions. The opportunity for the public sector goes beyond regulation. Governments are participating in financial markets, managing payments, borrowing, and investing at scale. They are increasingly exploring how digital assets can reshape how these activities are carried out. For example, tokenized deposits could help treasuries manage cash more efficiently by moving funds almost instantly across accounts and borders. Public disbursements, such as benefits or disaster relief, could be delivered through digital wallets, reducing administrative bottlenecks, and enabling recipients to access funds more quickly and securely, while potentially improving transparency and accountability. Built in controls could help ensure funds are spent only on approved categories, helping to protect taxpayer resources. The advantages of stablecoins on a blockchain environment include the speed of distribution, reduced processing costs, financial inclusion for the unbanked, and enhanced transparency and auditability. The promise of enabling faster, less expensive and more transparent government to citizen disbursements, government to business and citizen to government tax or fee payments can lead the way in normalizing these types of transactions given a government’s reach to all levels of society. Cross-border payments are another area where benefits are tangible. International contributions, aid disbursements, and trade settlements could be processed more cheaply, more transparently, and with faster settlement times. As Citi notes in its Digital Dollars: Banks and Public Sector Drive Blockchain Adoption 2 report, tokenized instruments could become a new standard for cross-border activity if regulatory clarity and industry standards advance in tandem. 44 The Legislative Landscape: Shaping Stablecoins and Tokenization in the Digital Asset Era