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- Citibank published a report suggesting that mass adoption of cryptocurrencies is close to happening thanks to the increase in interest and popularity of central bank digital currencies (CBDCs), as well as tokenization.
- Thanks to their ability to reduce costs and lessen the frictions associated with international transfers, CBDCs have been a major topic of conversation among world leaders.
- Ronit Ghose, Citi’s CFO, claims during an event that by 2030 there will be between “$5 trillion US dollars” circulating in CBDCs.
Mass adoption of cryptocurrencies is something that the entire industry has aspired to for many years. Now the financial firm Citi Group has published a report in which it says it believes that we are currently closer to the goal than ever.
In accordance with Decrypt, Citibank recently published a report titled “Money, Tokens, and Games: Blockchain’s Next Billion Users and Trillions in Value” suggesting that mass adoption of cryptocurrencies is close to happening.
The interesting detail is that Citi analysts suggest that this new wave of adoption It will come from the increased interest and popularity of central bank digital currencies (CBDCs), as well as tokenization.
Both are offshoots of the cryptocurrency industry and blockchain technology, although fundamentally they don’t necessarily resemble Bitcoin or other cryptos.
Growing interest in CBDC
CBDCs, despite closely resembling well-known stablecoins, are digital fiat currencies; that is, they are centralized since they are issued by the central bank of a country, such as the FED or the Central Bank of England.
Due to their ability to reduce costs and lessen the frictions associated with international transfers, CBDCs have been a major topic of conversation among world leaders. In fact, China already has its own digital currency of this type.
There will be $5 trillion dollars circulating in CBDC
Although many central banks are still unsure whether or not a CBDC is a good idea, Citi analysts believe that this new asset class will be the new catalyst for cryptocurrency adoption.
According to Decrypt, Ronit Ghose, Citi’s CFO, claims during an event that by 2030 there will be between “$5 trillion US dollars” circulating in CBDCs.
However, one aspect that Ghose highlights is that not all CBDCs will necessarily be based on blockchain technology.
Although the chain of blocks is a fundamental part of cryptocurrencies, it is not necessarily so for CBDCs. In some cases they could use a distributed ledger technology (DLT), which does not necessarily use the blockchain.
Despite this, C.iti believes that the development and use of CBDCs will help increase the adoption of the cryptocurrency industry.
Tokenization as a driver of the crypto industry
In addition to CBDCs, analysts believe that real asset tokenization will also contribute to the next wave of adoption.
It is important to note that tokenization refers to bringing real-world assets, such as a house or shares, onto the blockchain and according to Citi, this may be “the game-changing use case” for blockchain technology.
probably because combines the best of two worlds: the disintermediation provided by the blockchain with widely recognized traditional assets. In fact, Ghose on Twitter noted that by 2030 we could see “$4 – $5 trillion USD in tokenized assets”.
$4-5 trillion of tokenized securities by 2030 & $1trn trade finance 💥💥💥
Just launched our new GPS report on #blockhain #tokenisation
We assembled an Avengers A list on money, tokens & games 👇https://t.co/1MAMhFsopI@SurendranNisha @davebarna #citidigimoney #citi pic.twitter.com/BrOfMF7Yom
— Ronit Ghose (@ronitA380) March 30, 2023
However, there are still many hurdles to overcome before achieving mass adoption. Particularly the most relevant has to do with regulation.
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