2026 Perspectives for the Public Sector

Tokenization also presents opportunities for public debt and investment products. Governments and multilateral agencies are issuing digital bonds using distributed ledger technology (DLT) and other technologies to pilot systems that simplify issuance and settlement, reducing costs and broadening access for global investors. For institutions financing infrastructure or social projects, this could reduce costs and accelerate access to capital. Consider the World Bank’s I-Bond 3 for example, originally issued in 2018, as the first bond created and managed using distributed ledger technology (DLT). It showcases how blockchain can help make bond issuances more transparent, efficient, and cost-effective. By recording transactions on a shared ledger, it reduces intermediaries, shortens times, and enhances trust among investors and regulators. The initiative highlights the promise of DLT to modernize capital markets, paving the way for more automated and inclusive financing solutions. Despite the momentum, clear regulatory frameworks, technology scalability, and supporting market infrastructure must still be developed to address operational challenges. The GENIUS Act highlights the need for coordinated standards and collaborations across the public and private sectors. No single bank, technology provider, or regulator can deliver this transformation alone. Financial institutions are already testing how tokenized money can work in practice. Within Citi, this work is being advanced through Citi ® Token Services, a solution designed to enable the transfer of tokenized deposits and the exchange of value on a 24/7 basis across Citi’s global network. Citi Token Services is built with alignment on existing regulatory and compliance standards, demonstrating how digital money can operate safely within the boundaries of the traditional banking system. Citi’s approach illustrates one model for how digital assets can coexist with, and even enhance conventional financial systems, while avoiding parallel or unregulated networks. This is one example of what is possible in a regulated environment like Citi. However, the ultimate future value may come from an ecosystem in which multiple institutions, governments, and technology providers can look to connect seamlessly. As public institutions evaluate their role, collaboration will be central to progress. Participation in pilot programs, such as those focused on cross-border settlement, digital bond issuance, or tokenized liquidity management, will allow policy makers and treasurers to assess operational, legal, and fiscal impacts. Multilateral organizations could also play a convening role, establishing shared frameworks for digital identity, verification, and interoperability between jurisdictions. Engaging early will help the public sector shape market standards instead of adapting to them after the fact. Equally important will be education and capacity building. As digital asset systems evolve, government teams will need to strengthen their understanding of wallet management, smart contract functionality, cybersecurity, and regulatory oversight. Public-private relationships can accelerate readiness and position governments to help lead in the next phase of productive market development. The next stage of innovation will likely depend on aligning trust in financial institutions with the efficiency of blockchain technology. The GENIUS Act is a key step in that direction, bridging technology with governance to create a more connected, transparent, and inclusive global financial system. With legislation like the GENIUS Act laying a foundation, and continued collaboration between the public and private sectors, digital finance can seemingly evolve into a system that delivers tangible value for economies, institutions, and citizens alike. 3 https://www.worldbank.org/en/news/press-release/2018/08/23/world-bank-prices-first-global-blockchain-bond-raising-a110-million As stablecoins gain momentum, it is important to recognize that they are not all built equally . Citi Perspectives for the Public Sector 45