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Conferences like last week’s Digital Asset Summit remind us of the broader world that crypto is percolating. The attendance of some of the largest banks and asset managers (and what they’re working on) seems a solid indication of where we’re headed.
Citi was in the building, with research analyst Sophia Bantanidis giving the DAS crowd a talk on stablecoins. The financial giant’s base-case projection is for stablecoin issuance to reach $1.9 trillion by 2030. It labels growth in this segment as “blockchain’s ChatGPT moment for institutional adoption.”
My colleague Macauley Peterson wrote more about that here.
BNP Paribas revealed on Oct. 10 that it’s looking into issuing “a 1:1 reserve-backed form of digital money that provides a stable payment asset available on public blockchains, focused on G7 currencies.” So a stablecoin.
Citi is among the nine other banks BNP Paribas said it was exploring this with. Another is Goldman Sachs, which also sent an exec to DAS. Mathew McDermott, the firm’s head of digital assets, called tokenization the “topic du jour” — noting the use of distributed ledger technology for collateral mobility is one area of focus for Goldman.
It was the same day McDermott took the stage that US Bank launched a division focused on stablecoin issuance, crypto custody, asset tokenization and digital money movement.
But back to the BNP Paribas release: Citi investor services head Chris Cox confirmed the company is considering a Citi stablecoin.
“At the same time, we are focused on the ongoing adoption of our tokenized deposit capabilities…that are already addressing friction in payments,” he added.
The firm recently shared plans to integrate its blockchain-based Citi Token Services platform with its 24/7 USD clearing solution. That would allow multi-bank cross-border instant payments for institutional clients in the UK and US.
So while the bank has been exploring blockchain tech for many years, Cox explained, it continues to develop real-time quick and constant services using other means. The convergence of growing institutional interest in the crypto asset class (from asset managers, banks, asset owners, etc.) and regulatory clarity are important for Citi and its clients, he added.
Citi is also plotting crypto custody — a service Cox confirmed to me is slated to launch in 2026. The bank expects to initially support “the leading crypto assets” for institutional clients only.
“We are now simply extending our existing real-time and instant capabilities to be able to support digital assets, including crypto,” he said. “Ultimately, our vision is to provide a multi-asset and multi-network digital custody capability that is seamlessly connected to our existing custody proposition.”
And I know I wrote about BlackRock on Friday, but that centered around ETFs. I wanted to mention the world’s largest asset manager tripling (quadrupling?) down on its tokenization conviction, as vocalized on its Oct. 14 earnings call.
Bridging the gap between TradFi and crypto via tokenization is “one of the most exciting areas of growth in financial markets,” BlackRock CEO Larry Fink said. Digital wallets, after all, hold roughly $4.5 trillion in crypto tokens, stablecoins and tokenized assets, he noted.
“We envision a future where investors never need to leave a digital wallet to allocate efficiently across crypto, stablecoin and exposures to long-term stocks and bonds,” Fink explained.
While BlackRock CFO Martin Small added that the company would keep pursuing partnerships to make this vision a reality, Fink added it’s “spending a great deal of time on trying to develop our own technology related to this.”
Many agree making the adoption process incredibly easy will be crucial. (Remember these sentiments from last week?):
We’re in a constant “stay tuned” sort of scenario. It’s no longer a question of whether another goliath firm will enter crypto or lean more into the space — but just a matter of which one and when. Breaking news teams beware.
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Source: https://blockworks.co/news/tradfi-firms-plot-crypto-visions
