The investment bank has released its Stablecoins 2030 Web3 to Wall Street report, highlighting several changes that must be addressed for wider institutional adoption of the digital asset.
“Robustness, security and rigorous stress testing of the underlying technology are essential, particularly for institutional-scale use,” the report said.
Citi noted most mainstream corporates are currently curious rather than enthusiastic about stablecoins and enjoy faster and cheaper payments than cryptocurrency industry talking points.
“The evolution of digital assets – stablecoins, tokenised deposits, deposit tokens – feels in some ways like the early days of the dotcom boom.
“Sceptics once again proclaim that banks will be disintermediated. But we don’t believe crypto will burn down the existing system. Rather it is helping us reimagine it,” Citi said.
Visa’s head of institutional client solutions, Catherine Gu, said institutional adoption of stablecoins is still in its very early stages.
“Maybe 0.5 on a scale of 0 to 10. But we are seeing serious institutional interest in the space across banks, asset managers and other financial institutions,” Gu said.
Digital Economy Council of Australia CEO Amy-Rose Goodey agreed, saying institutional adoption has begun, but the next step is scale.
“Industry has already built transparency, audits and operational resilience into stablecoins. Government now has the chance to cement that progress with a clear, fit-for-purpose framework for payment stablecoins and digital asset platforms. If industry and government keep moving together, participation from banks, super funds and payment providers will follow naturally, with benefits flowing into payments, investment and capital markets,” she said.
Stablecoin issuance volume is up 40 per cent this year as executive orders in the US, the GENIUS Act and major platforms remove friction and build confidence in adoption. Citi said cryptocurrency company listings, record fundraising and breakthroughs in technology all suggest that institutional adoption is accelerating.
“We are excited by the opportunities presented by stablecoins, but they are not the answer to everything … We see an ecosystem where stablecoins, tokenised deposits and CBDCs can all flourish and coexist. Different forms of money will find different product market fit with usage shaped by trust, interoperability and regulatory clarity,” the report said.
However, bank tokens, including tokenised deposits and deposit tokens are preferred by many corporates, with Citi now forecasting that bank token transaction volumes could exceed stablecoins by 2030.
“Stablecoins may be a vital addition to the finance toolkit, especially for digitally native companies and investors, as well as frontier market households looking for an easy way to hold dollars. But for many, bank tokens – deposit tokens, tokenised deposits and similar – will be an easier integration.”
“We believe that the turnover of bank tokens could exceed stablecoins by 2030, even with a small shift of current traditional rails on chain.”
AMP chief economist Shane Oliver told InvestorDaily that apart from its use in money transfer, it is unclear as to whether traditional financial players will embrace stablecoins in a meaningful way.
“For fund managers, maybe they just come to be seen as just another form of cash but they won’t be seen as offering significant return potential (unlike say bitcoin) because they are tied to a particular currency,” Oliver said.
According to Ethereum Foundation’s head of RWA and stablecoins, Ash Morgan, transparency and auditability of stablecoin reserves are likely to be in focus as institutional adoption grows.
“Solutions for attesting to the backing of reserves can be delivered on-chain in real time, offering a level of visibility far beyond traditional balance sheets,” he said.
Citi emphasised that privacy remains one of the biggest hurdles for institutional adoption of public blockchains.
“While transparency is a key virtue of these systems, they pose a fundamental challenge for individuals and corporates. Most public chains are pseudonymous but transaction details are visible on-chain,” the report said.
For large-value transactions, particularly in capital markets, current scalability and liquidity of stablecoins may be insufficient, making corporates hesitant to use stablecoins for large-value transactions.
“Trust in stablecoin issuers, particularly private, non-bank entities, also poses a concern, leading many corporates to prefer banks and regulated financial intermediaries for high-value settlements,” the report said.
Citi pointed out that until recently, stablecoins were a niche product, used mostly in cryptocurrency trading. They are now gaining credibility not as speculative assets, but as infrastructure, playing a pivotal role in 24x7 money movement and real-time liquidity.
However, the underlying infrastructure of stablecoins is fragmented across multiple blockchains, institutional custodians and regulatory regimes.
“We believe this ecosystem is on the cusp of change led by improving regulatory clarity and is likely to create opportunities for new entrants,” Citi said.
The bank affirmed the growth of on-chain money, particularly stablecoins, does not mean the end of traditional banking.
“Citi is seeing large stablecoin issuers rely on regulated banks to safeguard their reserves, provide FX and cash management services, and act as on – and off – ramps for fiat currency. As stablecoin adoption grows, these connections will only deepen.”
According to the report, stablecoins are a catalyst for blockchain’s “ChatGPT” moment in institutional adoption – and they are here to stay.
“They are not a passing trend but a new set of digital rails – faster, more flexible and compatible with traditional banking services.”
As such, Citi has now updated their predictions for the market from April, noting growth remains primarily driven by the crypto-native ecosystem, e-commerce and digitally native companies and offshore/international demand for holding USD.
“We expect stronger stablecoin growth compared to 6–9 months ago ... we update our stablecoin forecasts to issuance volumes of US$1.9 trillion in our base case and US$4 trillion in our bull case, revised upwards from our April 2025 estimate of $1.6 and $3.7 trillion, respectively.”
Citi said a common misconception is that a single digital or blockchain money format will dominate and that this is a race with winners and losers.
“This does not mean that we are more bearish on other digital and on-chain money form factors. We do not believe in on-chain wars. We believe that many digital form factors will flourish,” the report said.
According to Citi’s global head of services, Shahmir Khaliq, the movement towards using blockchain technology for instantaneous settlement and real-time confirmation is a natural progression towards a 24x7, always-on world.
“We are focused on integrating and commercialising it with our other client offerings and are excited about the future benefits we will be able to unlock,” Khaliq said.
Goodey, CEO of Digital Economy Council of Australia, agreed.
“The opportunity is to give our economy 24/7 money that can move with the same speed as the assets it settles,” Goodey said.
“Australia already has a resilient financial system and a reputation for trust on the global stage. By setting clear rules early, we can extend that trust into digital markets and position ourselves as a leader internationally.”
She emphasised that the future is a digital economy tech stack comprised of several elements.
“Blockchain, AI, digital identity, autonomous agents, digital assets, tokenised markets, quantum, and advanced hardware working together. As these layers mature, the focus will shift from the plumbing to the outcomes: faster value transfer, deeper liquidity and new market designs. The technology will matter most once it is invisible, trusted and essential,” she said.
Goodey believes Australia is not moving as fast as some other markets but said it’s positive that we are moving.
“The priority is ensuring the framework is fit for purpose, protects consumers and is innovation friendly. With the digital asset platform exposure draft now released and a stablecoin framework expected, Australia is taking the right steps,” she said.
“The focus now is on turning policy momentum into real benefits for Australians and the economy through greater efficiencies, lower costs and new opportunities in payments and markets.”
According to Goodey, some of the most promising use cases in Australia are where stablecoins clearly make things faster, cheaper and simpler.
“Remittances to the Pacific are one example, where families rely on payments that today can be costly and slow. For small businesses, cross-border supplier payments are another, where stablecoins could streamline settlement and reduce friction.
“Domestically, e-commerce is also compelling, with the potential for instant refunds, faster reconciliation and lower processing costs. These are practical benefits that Australians and the wider economy can see and feel,” she said.
