Crypto Market Growth Boosted by DLT, Digital Assets, and Digital Money, Citi Report Says

Citi’s latest whitepaper on securities services evolution reveals the increasing interest and adoption of DLT, digital assets, and digital money in the global securities market.

Citi has released a new edition of its whitepaper on securities services evolution, which analyzes the changing landscape of securities services and the broader securities market ecosystem. The whitepaper is based on data collected from 12 Financial Market Infrastructures (FMIs), fintech firms, banks, and industry players, and provides insights into the challenges and expectations shaping the global securities market.

Among other findings, the whitepaper identifies three bullish factors that could drive the growth of the crypto market in the future. These factors are:

• The growing interest in Distributed Ledger Technology (DLT). According to Citi’s survey, 74% of respondents are engaging in DLT and digital asset activities, up from 47% last year. “74% of our respondents engaging in Distributed Ledger Technology (DLT) and digital asset initiatives (increased from 47% last year) in a clear sign that DLT momentum continues to grow,” Citi’s report stated.
• The increasing adoption of digital assets. Citi’s survey also revealed that 38% of market participants are currently offering digital asset services, compared to 22% for DLT. This means that about 190 and 110 of the nearly 500 market participants surveyed by Citi are offering digital asset or DLT services, respectively.
• The rapid evolution of digital money. The whitepaper also highlighted the growing confidence in digital money, including central bank digital currencies (CBDCs) and stablecoins issued by banks or non-banks. The survey showed that 87% of respondents see digital money as a strong means to support securities settlement, up from 72% last year.

The whitepaper also discussed the impact of accelerated settlement on the securities ecosystem. According to Citi’s findings, 77% of respondents expect a substantial impact on their business from the move to T+1 in major markets. “Our research shows that the rapidly accelerating move to T+1 in major markets poses significant challenges to industry participants, leaving an urgent need to drive innovation, automation, and efficiencies in global operating models,” said Okan Pekin, Global Head of Securities Services at Citi.

To prepare for accelerated settlement, participants are prioritizing clients and counterparties first, followed by internal platforms and processes, and considering staffing and location strategies. The survey results indicate that 69% are focusing on automating and standardizing client communications, while 64% aim to enhance or replace their technology platforms.