09/04/2024 | Press release | Distributed by Public on 09/04/2024 00:10
London - With the ongoing commercialization of distributed ledger technology (DLT) and digital assets, the use of digital money going beyond central bank digital currencies (CBDCs) is set to significantly increase, according to Citi's latest and fourth edition of its Securities Services Evolution whitepaper series.
65% of respondents plan to use non-CBDC options like stablecoins, tokenized deposits, money market funds and digital payment systems to support cash and liquidity requirements for digital securities settlements by 2026, versus 15% who plan to use CBDCs. This is a stark contrast to the previous year where CBDCs were the preferred form of digital money at 52%.
The whitepaper polled close to 500 market participants encompassing buy- and sell-side institutions and offers timely insights into the post-trade industry. The whitepaper also incorporates qualitative insights from 14 financial market infrastructures (FMIs) and for the first time, includes an in-depth regional view of the industry across Asia Pacific, Europe, North America, and Latin America.
Okan Pekin, Head of Securities Services, Citi, said, "The move to T+1 has taken center stage in the post-trade industry over the last few years. Our latest whitepaper - the largest since its inception in 2021 - focuses on the next frontier for the industry which is the growing applicability of technologies. This includes distributed ledger technology and digital assets, and the significant potential for tokenization to scale. These developments will continue to transform the securities landscape as we continue to move towards shorter settlement cycles across multiple markets worldwide. "
Other notable findings from this year's whitepaper include:
On the settlements side:
"The accelerating convergence of traditional and digital assets and operating models reinforces the need for modern platforms, reliable data, and real-time information. We expect to see continued investments into automation, cloud infrastructure, and APIs as well as solutions that integrate with DLT networks. In response to these trends, Citi continues to innovate and leverage our integrated product offering to serve clients in today's dynamic ecosystem," said Amit Agarwal, Head of Custody, Securities Services, Citi.
About Citi
Citi is a preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the United States. Citi does business in more than 180 countries and jurisdictions, providing corporations, governments, investors, institutions and individuals with a broad range of financial products and services.
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