Citi Institute builds its forecast from penetration assumptions rather than a single top-down model. The base case applies a small tokenized share to roughly $392 trillion of addressable assets. For example, Citi assumes 3% of the $86 trillion U.S. equity market moves onchain by 2030. That one assumption adds about $2.6 trillion, which equals nearly half the total. Meanwhile, Citi assumes 10% of the $8 trillion Treasury bill market tokenizes. It also assumes 5% of money market funds follow, and those two pieces add roughly $1.4 trillion. In contrast, private credit, private equity and real estate funds together contribute only about $400 billion.
The scenarios scale from that base. The bear case halves the base figure to $2.7 trillion. It reflects slower regulation, weak interoperability and delayed institutional participation. The bull case multiplies the base by 1.5 to reach $8.2 trillion, assuming faster rule-making and infrastructure buildout. Today’s market looks tiny against those targets. Citi cites DefiLlama data showing about $17 billion in tokenized financial assets. That figure rose roughly threefold in a year. Treasuries, bonds and money market funds make up over 55% of it. Gold and commodities add about 34%. Notably, Citi still places tokenization at only 1.5 on a ten-point adoption curve.
🏛️ BREAKING: Citigroup reports tokenization has moved beyond pilot programs into core financial infrastructure. In a report released today, Citi projects tokenized assets could reach $5.5 trillion by 2030, with a bull case of $8.2 trillion. https://t.co/3Bh8g2T5eR
— Generation Infinity (@Genfinity) October 14, 2026
Where Citi Sits Among Other Forecasts
Outside estimates for 2030 vary widely. Citi lands in the middle of the range. McKinsey projects $1 trillion to $4 trillion, and Deutsche Bank Research projects $1.5 trillion to $2 trillion. On the other side, Roland Berger forecasts $10 trillion and ARK Invest forecasts $11 trillion. Citi previously estimated $4 trillion to $5 trillion, so the new base case raises the midpoint modestly. More importantly, the mix has changed. Citi now expects public securities and liquid collateral to contribute more. DTCC, NYSE and Nasdaq have announced concrete initiatives. Private markets, by comparison, remain illiquid and relationship-driven, so Citi expects them to scale slowly.
Why Collateral Is the First Practical Use Case
A companion paper from Citi Services explains why collateral matters so much. It carries the title “The Digital Frontier: Collateral in a Tokenized World.” The authors argue that tokenization does not create liquidity or alter an asset’s economics. Instead, it changes how quickly and cheaply an eligible asset can move. Consider a Friday evening variation margin call from a Tokyo counterparty. Under the traditional model, the call stays open over the weekend. The manager either posts idle cash or carries exposure until Monday. With a tokenized bond and a settlement token, both legs exchange at the same moment regardless of market hours. As a result, the cash buffer that firms hold against timing gaps could shrink.
Citi identifies three specific changes for collateral managers. First, settlement stops waiting for the clock, so firms can pledge, substitute or recall assets around the clock. Second, the eligible universe widens beyond cash and government securities. A tokenized money market fund share, for instance, can keep accruing yield while a manager pledges it. Third, collateral moves across currencies and jurisdictions with a shared audit trail rather than through correspondent chains. Eric Ilardi, Citi’s Global Head of Collateral Management for Investor Services, put it plainly. “Tokenization is not a separate initiative from collateral optimization. It is the next stage of it.”
Three Forces Behind the Shift From Pilots to Production
Citi points to three converging forces. First, market infrastructure providers now build tokenization into core workflows. DTCC received an SEC no-action letter in December 2025 for a three-year tokenization service. It began live production trades in July. Reports indicate a full launch this month. Second, regulated onchain money has arrived. Citi projects stablecoins could reach $1.9 trillion by 2030, and tokenized deposits add a bank-issued settlement option. Third, regulation has become clearer, although the U.S. Clarity Act still needed a full Senate vote when Citi Institute published its report in June.
A Hybrid Phase Before Any Full Cutover
Citi does not expect a clean break from legacy systems. Both papers describe a hybrid period, and Citi Institute warns it may feel messy. In the near term, traditional and tokenized rails run side by side for 12 to 24 months. Meanwhile, eligible collateral schedules begin to widen. Over the medium term, tokenized inventory connects to more counterparties, custodians and settlement venues. Eventually, firms manage both kinds of collateral as one continuously optimized pool. Clients never see which rail carried a given movement. Importantly, Citi argues that firms treating tokenization as a side experiment will end up running two weak programs.
Risks That Could Slow the Forecast
Citi lists several constraints that could push outcomes toward the bear case. Atomic settlement is harder to reverse than a traditional transfer, so the surrounding controls must be stronger. The Citi Services paper calls for four safeguards. These cover institutional-grade key custody, independent review of programmable logic, legal certainty in each jurisdiction and a fallback to traditional rails. Tokenized money market funds also face extra friction. They depend on fund structures and existing infrastructure. Regulators also scrutinized the sector after the liquidity stresses of 2020 and 2023. Furthermore, Citi stresses that tokenization does not guarantee deep secondary markets or active market makers. Readers should therefore treat the $5.5 trillion figure as a scenario built on stated assumptions, not a prediction.
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