Main Points :
- Citi has raised its 2030 forecast for stablecoin issuance to $1.9 trillion (base case) and $4 trillion (bull case).
- Stablecoins could underpin as much as $200 trillion in annual transaction flow in a mature scenario.
- Bank tokens (tokenized deposits) may overtake stablecoins in transaction volume by 2030 due to regulatory comfort and built-in compliance.
- Digital monies—stablecoins, CBDCs, tokenized commercial bank money—are likely to co-exist in a hybrid monetary system.
- Recent moves by major banks (e.g. European consortium) and issuers (e.g. Circle’s reversible transaction model) hint at evolving architectures and regulation.
Introduction
In September 2025, Citi published an updated forecast for the stablecoin market, sharply raising its prior estimate in response to accelerating issuance, new regulatory developments, and growing adoption momentum in real-world commerce. Their revised outlook projects that over the coming five years, stablecoins could play an ever more foundational role in global finance—yet they also caution that a new class of bank tokens (tokenized deposits) may carve out a dominant niche. This article explores the implications of Citi’s forecast, examines the evolving architecture of digital money (CBDCs, stablecoins, bank tokens), reviews emerging industry moves, and considers strategic opportunities for crypto investors, fintech practitioners, and blockchain integrators.
The Revised Forecast: Why Citi Raised Its Numbers
Citi’s earlier 2025 forecast (published in April) had placed stablecoin issuance at $1.6 trillion (base case) with a bull case of $3.7 trillion by 2030. In its new “Stablecoins 2030” report, Citi said the market’s momentum over the past six months—particularly issuance growth, new project announcements, and stronger integration with payments rails—warrants an upward revision: now $1.9 trillion in the base scenario and $4 trillion in the bull case.
Key supporting data include:
- The outstanding issuance rose from about $200 billion at the start of 2025 to $280 billion by late September.
- Citi argues that if stablecoins achieve velocity and broad usage similar to fiat, they could support $100 trillion in annual transaction volume in the base case, or $200 trillion in bull scenarios.
Citi frames this not as a replacement of the existing monetary system, but as a reimagining of financial infrastructure: stablecoins, bank tokens, and CBDCs may each find their coexisting roles.
Understanding Bank Tokens and the Shift in Value Proposition
What Are Bank Tokens?
Bank tokens (sometimes called tokenized deposits or deposit tokens) refer to digital tokens issued by regulated banks, representing claims on on-chain funds held in bank reserve accounts (or other backed instruments). In other words, they are direct digital claims to bank money but issued as tokens, rather than the traditional ledger entry in legacy banking.
Why Might They Outpace Stablecoins?
Citi’s report and other industry views highlight multiple reasons why bank tokens might surpass stablecoins in aggregate transaction volume by 2030:
- Regulatory safety and compliance baked in
Enterprises often prioritize regulatory certainty, built-in compliance, and legal enforceability. A regulated bank issuing a token (with KYC/AML, capital requirements, oversight) can appeal more to large institutions than privately issued stablecoins, especially in heavily regulated jurisdictions. - Built-in settlement infrastructure
Bank tokens can settle natively into existing banking systems. This avoids “off-ramp” friction (from token to fiat) that many stablecoins must navigate via exchanges or custodians. - Single-ledger architectures and unified platforms
Emerging visions for a unified ledger—where tokenized central bank reserves, commercial bank money, and government bonds cohabit—favor tokenized deposit models. In such a system, different token types share the same settlement infrastructure, reducing fragmentation. - Enterprise demand and composability
Firms embedding payments, compliance, and liquidity management into applications may prefer “bank token rails” that allow composable workflows with predictable legal backing.
Because of these advantages, Citi estimates that by 2030 the transaction volume handled by bank tokens could exceed that of stablecoins.
The Hybrid Money Architecture: Coexistence of CBDC, Stablecoins & Bank Tokens
Rather than assuming one “winner,” most forward-looking frameworks envision a hybrid monetary ecosystem in which multiple forms of digital money play roles suited to their strengths.
The Trilogy of Tokenized Money
The Bank for International Settlements (BIS) and other thought leaders propose a “trilogy” of token types as the foundation of next-gen finance:
- Tokenized central bank reserves (wholesale CBDC)
These serve as the ultimate settlement asset, trusted for finality and anchored in central bank money. They form the core of a stable value layer in tokenized systems. - Tokenized commercial bank money / bank tokens
These are the digital equivalent of retail and institutional bank deposits, with added programmability and token interoperability. - Privately issued stablecoins / e-money tokens
These provide an additional layer that can bridge digital commerce use cases, especially for cross-border and merchant settlement, offering innovation and flexibility.
In this layered system, transfers could occur across token types seamlessly, enabling composability across DeFi, payments, finance, and securities.
Risks, Fragmentation, and Design Challenges
However, this vision faces multiple challenges:
- Regulatory fragmentation: Different jurisdictions may treat private stablecoins, CBDCs, or bank tokens differently, risking cross-border fragmentation.
- Liquidity fragmentation: If token types cannot seamlessly convert or settle, the system could break into silos.
- Governance and interoperability: Standards are needed to govern how token types interoperate, who mints or redeems them, liability models, and dispute mechanisms.
- Monetary policy implications: How do central banks manage policy when broad layers of private tokens exist?
- Security, scalability, and identity: Ensuring robust infrastructure, performance, and KYC/privacy tradeoffs is nontrivial.
Still, many central banks and infrastructure providers view this hybrid architecture as a plausible path forward.
Recent Developments & Emerging Trends
European Banks Launch Euro Stablecoin Consortium
On September 25, 2025, a consortium of nine major European banks (including ING, UniCredit, CaixaBank, DekaBank) announced plans to launch a euro-denominated stablecoin, expected in the second half of 2026. The project is designed under the EU’s MiCAR framework and aims to provide regulated digital payment solutions across Europe. This move underscores how traditional banks are entering the digital money space, blurring lines between payments and crypto infrastructure.
Circle Exploring Reversible Transactions
Circle, issuer of USDC, is reportedly experimenting with a transaction model that allows reversibility/refunds akin to credit card chargebacks—via a counter-payment layer rather than altering blockchain immutability. This shift reflects the need to reconcile crypto’s permanence with commercial disputability, especially for consumer and enterprise use. The controversial move suggests that stablecoin infrastructure may evolve toward hybrid models combining ledger finality and optional “undo” layers.
Fnality’s Institutional Backing
Blockchain payments firm Fnality recently raised $136 million in Series C funding, backed by major banks including Citi and Bank of America. Fnality’s platform (which has launched a Sterling payment system in the UK) is specifically targeting institutional settlement and may play a bridging role in tokenized finance infrastructure.
Legislative Shifts: GENIUS Act & US Treasury Impacts
In the U.S., the GENIUS Act (passed in 2025) mandates that dollar-pegged stablecoins be backed 1:1 with high-quality reserves such as U.S. Treasuries. Meanwhile, research shows that Tether alone holds about $98.5 billion in Treasury bills, representing ~1.6% of outstanding short-term Treasuries. Some analyses suggest this stablecoin demand is depressing short-term Treasury yields—what’s termed the “stablecoin discount” effect.
At the same time, not all institutions are upwardly bullish: J.P. Morgan has trimmed expectations, forecasting stablecoins may only reach $500 billion by 2028, citing limited real-world usage thus far.
Strategic Implications & Opportunities
Given these developments, what should participants—investors, fintechs, blockchain developers—watch or act on?
- Watch tokenization infrastructure
Platforms enabling issuance, redemption, interoperability, compliance, and settlement (e.g. cross-token bridges) will be critical. Investing or partnering with protocol layers that connect CBDC, stablecoin, and bank token rails may yield outsized leverage. - Consider dual token strategies
For startups or issuers, blending a stablecoin offering (for flexibility and reach) with a bank-token approach (for institutional credibility) could hedge regulatory and market risks. - Leverage programmable compliance
Embedding rules (KYC, AML, sanctions screening) at token-level will distinguish more scalable solutions, especially for enterprise and B2B adoption. - Monitor regulatory evolutions
Legislation (like GENIUS in the U.S., MiCAR in the EU) will shape token structures, reserve requirements, and permissible uses. Entities that align early with regulatory expectations may gain competitive advantage. - Build real-world use cases early
The transition from “crypto playground” to real commerce requires use cases (cross-border payments, supply chain finance, micro-payments, embedded DeFi) that solve friction in current systems. - Mind macro & liquidity dynamics
As stablecoins grow as demanders of short-term Treasuries, their impact on money markets, liquidity, and rates (the “stablecoin discount”) may influence central bank responses and systemic risks.
Summary & Outlook
Citi’s newly revised forecast underscores the accelerating trajectory of stablecoin adoption. The possibility that issuance may reach $1.9 trillion (base case) or up to $4 trillion (bull case) by 2030 is no longer dismissed as speculative. Yet, the bigger structural story may lie in the rise of bank tokens, which offer built-in regulatory compliance, settlement safety, and seamless integration with banking rails.
Rather than a zero-sum battle, the future likely holds a hybrid monetary architecture in which CBDCs, bank tokens, and stablecoins coalesce into layered, interoperable ecosystems. Recent initiatives—European bank stablecoin pilots, Circle’s rethinking of immutable ledgers, Fnality’s institutional push—are early harbingers of this transformation.
For those seeking the next frontier in crypto investment, innovation, or blockchain deployment, the intersection of tokenization infrastructure, governance protocols, and real-world integrations offers fertile ground. But success will require not only technological excellence, but deep regulatory alignment, liquidity design, and careful systems thinking.
If you like, I can produce an updated 2025–2030 projection graph (in USD) tailored to your audience, and also deliver a short “opportunity playbook” for startups or crypto funds. Would you like me to send that next?
