Trade: Digital Assets in the New Era of Global Trade
David Cunningham — Citi
Citi operates in 160 countries with $5 trillion daily transfers, advancing digital assets and blockchain for global 24/7 instant money movement, focusing on tokenized deposits, stablecoins, and CBDCs amid evolving US regulation that favors stablecoins over CBDCs for sovereignty and dollar dominance. Tokenized liquidity spans key hubs, enabling seamless global client transactions without new accounts. The digital dollar ecosystem is poised for explosive growth, driven by regulatory clarity, improved scalability, and institutional adoption, challenging legacy payment infrastructures and fostering global interoperability and asset tokenization, notably in securities settlement.
"Stablecoins are like digital checks—bearer instruments that empower multi-bank, 24/7 instant money movement, revolutionizing global finance with scalability, transparency, and efficiency while driving the future of digital dollars and blockchain adoption."
Summary
- Digital currencies, especially stablecoins, are growing rapidly, with global use and significant capital inflows to US Treasuries. - Blockchain technology has matured, becoming scalable, efficient, eco-friendly, and widely used behind-the-scenes in financial transactions. - Citi developed a 24/7 instant cross-border payment platform using tokenized deposits to simplify global liquidity management for clients. - CBDCs face skepticism in the US due to privacy and sovereignty concerns, while stablecoins are viewed more favorably as supporting US dollar dominance. - The future holds accelerated blockchain adoption, increased public sector involvement, tokenization of assets, and potential disruptions to traditional banking infrastructure.
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Blockchain's 'ChatGPT moment': Citi executive predicts explosive growth in digital dollars
David Cunningham, Citi's global head of digital assets strategy, outlined how blockchain technology has "crossed the chasm into real usage" during his address at the Nordic Fintech Summit in Helsinki yesterday.
Speaking to industry leaders on the summit's opening day, Cunningham described 2025 as the year blockchain will have its "ChatGPT moment" – a tipping point where regulatory clarity, improved scalability, and institutional adoption converge to drive explosive growth in digital currencies, particularly dollar-based stablecoins.
Stablecoins favoured over CBDCs in US strategy
Cunningham highlighted the striking contrast in US regulatory attitudes toward different forms of digital currency, with recent executive orders characterizing central bank digital currencies (CBDCs) as "a threat to American sovereignty and privacy," while portraying stablecoins as protectors of American interests.
"Stablecoins help protect American sovereignty and promote the US dollar globally," Cunningham said, explaining that regulated dollar-based stablecoins are driving significant capital inflows into US Treasuries. "There's a massive influx of capital into the US and into US Treasuries, which helps reduce the interest rate the US government pays, reduces the debt, and cements the dollar as the world's language for doing business internationally."
The presentation revealed that over 99% of stablecoins are US dollar-based, reinforcing the currency's dominance in global trade where approximately 70% of transactions already use dollars.
Citi's 24/7 instant payment solution
Cunningham detailed Citi's own approach to the digital assets space through its Tokenized Deposit platform, which enables the bank's clients to move money instantly across borders at any time.
"Our goal was to make 24/7 instant money movement easy for clients—no new accounts, no new terms, just seamless real-time global liquidity management," he said.
The solution has been implemented across Citi's major hubs including Singapore, New York, London, and Hong Kong, with Dublin and other locations planned to follow. By tokenizing liquidity held at these branches, Citi has created a shared pool that allows clients to transfer full value instantly across the network.
The digital format race
Cunningham described an ongoing "digital format race" between three primary approaches to digital currency:
1. **Tokenized deposits**: Bank-issued tokens representing a promise to pay, leveraging existing balance sheets and enabling global commerce.
2. **CBDCs**: Central bank liabilities that typically don't create credit and see limited cross-border use.
3. **Stablecoins**: Bearer instruments that are multi-bank by default, resulting in faster adoption despite concerns around anti-money laundering safeguards.
The choice between these formats has significant implications for financial institutions, their customers, and monetary sovereignty, with different regions taking varying approaches to regulation and implementation.
Projected growth and future outlook
"Blockchain is now operating behind the scenes and at the forefront of moving millions every day—it's having its ChatGPT moment of real explosion," Cunningham told attendees.
According to Citi's recent digital dollars report, stablecoin market capitalization is expected to grow from the current $230 billion to at least $1.6 trillion by 2030 in their base case scenario, with a bullish projection reaching $3.7 trillion.
Challenges for traditional banking infrastructure
The presentation concluded with a candid assessment of the challenges facing established financial institutions as blockchain adoption accelerates.
"If paying directly to a public blockchain wallet becomes the norm, the legacy infrastructure might become obsolete. That's what large banks like ours are grappling with," Cunningham acknowledged.
Recent regulatory changes, particularly the revocation of SAB 21 policy in the US, have created a more level playing field for large organizations to operate directly on blockchain networks, which Cunningham believes will "create greater utility and broader adoption."
The Nordic Fintech Summit continues today in Helsinki, bringing together financial technology leaders from across the region to discuss innovations and trends shaping the future of finance.
Part of Nordic Fintech Summit