Citi: Institutional Tokenization Shifts Towards Production Infrastructure

Citi stated in its official insights report "Digital Frontier: Collateral in a Tokenized World" that financial markets are accelerating their transition to round-the-clock operations, and collateral management is undergoing a structural evolution. Institutional-level tokenization is moving beyond isolated proof-of-concept initiatives and is establishing scalable operational tracks across global banking, custody, and market infrastructure, turning collateral into a continuous liquidity and optimization engine. Citi pointed out that combining tokenized assets with regulated on-chain settlement currencies can achieve instant atomic cash-to-cash transactions, eliminating multi-day gap risks and expanding the range of eligible collateral to include tools such as tokenized money market funds. Global asset managers and asset owners will unify traditional and digital collateral into a single, continuously optimized inventory over years of hybrid operating models, covering counterparties, custodians, and settlement venues.

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