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Today, the most popular way to experience the Metaverse is via a video game played on a virtual reality (VR) headset. But in the report that follows, we discuss the possibility that the Metaverse is moving towards becoming the next iteration of the internet, or Web3. This “Open Metaverse” would be community-owned, community-governed, and a freely interoperable version that ensures privacy by design. Users should increasingly be able to access a host of use cases, including commerce, art, media, advertising, healthcare, and social collaboration. A device-agnostic Metaverse would be accessible via personal computers, game consoles, and smartphones, resulting in a large ecosystem. Using this broad definition, the total addressable market for the Metaverse could be between $8 trillion and $13 trillion by 2030, with total Metaverse users numbering around five billion. But getting to that market level is going to require infrastructure investment. The content streaming environment of the Metaverse will likely require a computational efficiency improvement of over 1,000x today’s levels. Investment will be needed in areas such as compute, storage, network infrastructure, consumer hardware, and game development platforms. The definition of what counts as money in the Open Metaverse is also likely to be very different from what counts as money in the real world today. Interoperability and seamless exchange between underlying blockchain technology are critical to ensure a frictionless user experience. Different forms of cryptocurrency are expected to dominate, but given the multi-chain trend in the crypto ecosystem, cryptocurrency will likely coexist with fiat currencies, central bank digital currencies (CBDCs), and stablecoins. Finally, if the Metaverse is indeed the new iteration of the internet, it will mostly likely attract greater scrutiny from global regulators, policymakers, and governments. Issues such as anti-money laundering rules for exchanges and wallets, the use of decentralized finance (DeFi), crypto assets, and property rights will all have to be addressed. Authors: Ronit Ghose, CFA,Nisha Surendran,Sophia Bantanidis,Kaiwan Master,Ronak S Shah,Puneet Singhvi,

<p>Today, the most popular way to experience the Metaverse is via a video game played on a virtual reality (VR) headset. But in the report that follows, we discuss the possibility that the Metaverse is moving towards becoming the next iteration of the internet, or Web3. This &ldquo;Open Metaverse&rdquo; would be community-owned, community-governed, and a freely interoperable version that ensures privacy by design.<br /><br />Users should increasingly be able to access a host of use cases, including commerce, art, media, advertising, healthcare, and social collaboration. A device-agnostic Metaverse would be accessible via personal computers, game consoles, and smartphones, resulting in a large ecosystem. Using this broad definition, the total addressable market for the Metaverse could be between $8 trillion and $13 trillion by 2030, with total Metaverse users numbering around five billion.<br /><br />But getting to that market level is going to require infrastructure investment. The content streaming environment of the Metaverse will likely require a computational efficiency improvement of over 1,000x today&rsquo;s levels. Investment will be needed in areas such as compute, storage, network infrastructure, consumer hardware, and game development platforms.<br /><br />The definition of what counts as money in the Open Metaverse is also likely to be very different from what counts as money in the real world today. Interoperability and seamless exchange between underlying blockchain technology are critical to ensure a frictionless user experience. Different forms of cryptocurrency are expected to dominate, but given the multi-chain trend in the crypto ecosystem, cryptocurrency will likely coexist with fiat currencies, central bank digital currencies (CBDCs), and stablecoins.<br /><br />Finally, if the Metaverse is indeed the new iteration of the internet, it will mostly likely attract greater scrutiny from global regulators, policymakers, and governments. Issues such as anti-money laundering rules for exchanges and wallets, the use of decentralized finance (DeFi), crypto assets, and property rights will all have to be addressed.</p>
<p><iframe src="https://www.citivelocity.com/cv-content-web/eppublic/wrap/epfcms/html/1_yoim445t" width="800" height="450" allowfullscreen="allowfullscreen"></iframe></p>
<p><span class="authList" style="display: none;"><iframe src="https://ir.citi.com/gps/IyjCME0N6tTM7CpteTvOUhDBZDqbXnU48xzBT9H0mqEZGeuYxNqxq%2FcTJpzpzjYTIwrTKKmOXBk%3D?embedcode=true&amp;autoscale=true&amp;autoplay=true&amp;touchControls=true" width="810" height="450" allowfullscreen="allowfullscreen"></iframe>Authors: Ronit Ghose, CFA,Nisha Surendran,Sophia Bantanidis,Kaiwan Master,Ronak S Shah,Puneet Singhvi,</span></p>

The Metaverse Is Potentially an $8 Trillion to $13 Trillion Opportunity We believe the Metaverse may be the next generation of the internet — combining the physical and digital world in a persistent and immersive manner — and not purely a Virtual Reality world. A device-agnostic Metaverse accessible via PCs, game consoles, and smartphones could results in a very large ecosystem. Based on our definition, we estimate the total addressable market for the Metaverse economy could grow to between $8 trillion and $13 trillion by 2030.

We believe the Metaverse may be the next generation of the internet — combining the physical and digital world in a persistent and immersive manner — and not purely a Virtual Reality world. A device-agnostic Metaverse accessible via PCs, game consoles, and smartphones could results in a very large ecosystem. Based on our definition, we estimate the total addressable market for the Metaverse economy could grow to between $8 trillion and $13 trillion by 2030.

The Metaverse Is Potentially an $8 Trillion to $13 Trillion Opportunity

Metaverse Use Cases Gaming is viewed as a key Metaverse use case for the next several years due to the immersive and multi-player experience of the space currently But we believe that the Metaverse will eventually help us find new and enhanced ways to do all our current activities, including commerce, entertainment and media, education and training, manufacturing and enterprise in general. Enterprise use cases of the Metaverse in the coming years will likely include internal collaboration, client contact, sales and marketing, advertising, events and conference, engineering and design, and workforce training.

Gaming is viewed as a key Metaverse use case for the next several years due to the immersive and multi-player experience of the space currently But we believe that the Metaverse will eventually help us find new and enhanced ways to do all our current activities, including commerce, entertainment and media, education and training, manufacturing and enterprise in general. Enterprise use cases of the Metaverse in the coming years will likely include internal collaboration, client contact, sales and marketing, advertising, events and conference, engineering and design, and workforce training.

Metaverse Use Cases

Still Early: Metaverse Infrastructure Building In the current state, the internet infrastructure is unsuitable for building a full-immersive, content streaming Metaverse environment, that enables users to go seamlessly from one experience to another. To make the vision of Metaverse a reality, we expect significant investment in a confluence of technology. Low latency — the time it takes a data signal to travel from one point on the internet to another point and then come back — is critical to building a more realistic user experience.

In the current state, the internet infrastructure is unsuitable for building a full-immersive, content streaming Metaverse environment, that enables users to go seamlessly from one experience to another. To make the vision of Metaverse a reality, we expect significant investment in a confluence of technology. Low latency — the time it takes a data signal to travel from one point on the internet to another point and then come back — is critical to building a more realistic user experience.

Still Early: Metaverse Infrastructure Building

Money in the Metaverse We expect the next generation of the internet, i.e., the Metaverse, would encapsulate a range of form factors of money, including the existing/traditional forms of money and also upcoming digitally-native forms of money — cryptocurrency, stablecoins, central bank digital currencies (CBDCs) — that were out of scope in a pre-blockchain virtual world.

We expect the next generation of the internet, i.e., the Metaverse, would encapsulate a range of form factors of money, including the existing/traditional forms of money and also upcoming digitally-native forms of money — cryptocurrency, stablecoins, central bank digital currencies (CBDCs) — that were out of scope in a pre-blockchain virtual world.

Money in the Metaverse

Today, the most popular way to experience the Metaverse is via a video game played on a virtual reality (VR) headset. But in the report that follows, we discuss the possibility that the Metaverse is moving towards becoming the next iteration of the internet, or Web3. This “Open Metaverse” would be community-owned, community-governed, and a freely interoperable version that ensures privacy by design. Users should increasingly be able to access a host of use cases, including commerce, art, media, advertising, healthcare, and social collaboration. A device-agnostic Metaverse would be accessible via personal computers, game consoles, and smartphones, resulting in a large ecosystem. Using this broad definition, the total addressable market for the Metaverse could be between $8 trillion and $13 trillion by 2030, with total Metaverse users numbering around five billion. But getting to that market level is going to require infrastructure investment. The content streaming environment of the Metaverse will likely require a computational efficiency improvement of over 1,000x today’s levels. Investment will be needed in areas such as compute, storage, network infrastructure, consumer hardware, and game development platforms. The definition of what counts as money in the Open Metaverse is also likely to be very different from what counts as money in the real world today. Interoperability and seamless exchange between underlying blockchain technology are critical to ensure a frictionless user experience. Different forms of cryptocurrency are expected to dominate, but given the multi-chain trend in the crypto ecosystem, cryptocurrency will likely coexist with fiat currencies, central bank digital currencies (CBDCs), and stablecoins. Finally, if the Metaverse is indeed the new iteration of the internet, it will mostly likely attract greater scrutiny from global regulators, policymakers, and governments. Issues such as anti-money laundering rules for exchanges and wallets, the use of decentralized finance (DeFi), crypto assets, and property rights will all have to be addressed. Authors: Ronit Ghose, CFA,Nisha Surendran,Sophia Bantanidis,Kaiwan Master,Ronak S Shah,Puneet Singhvi, The Metaverse Is Potentially an $8 Trillion to $13 Trillion Opportunity We believe the Metaverse may be the next generation of the internet — combining the physical and digital world in a persistent and immersive manner — and not purely a Virtual Reality world. A device-agnostic Metaverse accessible via PCs, game consoles, and smartphones could results in a very large ecosystem. Based on our definition, we estimate the total addressable market for the Metaverse economy could grow to between $8 trillion and $13 trillion by 2030. Metaverse Use Cases Gaming is viewed as a key Metaverse use case for the next several years due to the immersive and multi-player experience of the space currently But we believe that the Metaverse will eventually help us find new and enhanced ways to do all our current activities, including commerce, entertainment and media, education and training, manufacturing and enterprise in general. Enterprise use cases of the Metaverse in the coming years will likely include internal collaboration, client contact, sales and marketing, advertising, events and conference, engineering and design, and workforce training. Still Early: Metaverse Infrastructure Building In the current state, the internet infrastructure is unsuitable for building a full-immersive, content streaming Metaverse environment, that enables users to go seamlessly from one experience to another. To make the vision of Metaverse a reality, we expect significant investment in a confluence of technology. Low latency — the time it takes a data signal to travel from one point on the internet to another point and then come back — is critical to building a more realistic user experience. Money in the Metaverse We expect the next generation of the internet, i.e., the Metaverse, would encapsulate a range of form factors of money, including the existing/traditional forms of money and also upcoming digitally-native forms of money — cryptocurrency, stablecoins, central bank digital currencies (CBDCs) — that were out of scope in a pre-blockchain virtual world.

The Metaverse may be the next generation of the internet, combining the physical and digital world in an immersive way.

Metaverse and Money - CitiGPS

Decrypting the Future

The Metaverse as a concept has been around for a few decades. However, interest in the virtual world spiked at the end of 2021 following a rise in sales of non-fungible tokens (NFTs) as well as announcements from Big Tech players indicating their interest and investment in the space.

Metaverse and Money

Jason B Bazinet

Thomas A Singlehurst, CFA

Ronald Josey

Ygal Arounian

For over 600 years, innovations spawned new forms of entertainment. The printing press (invented around 1436) unleashed book publishing. Later, radio and movies (1895), TV (1927), and video games (1958) sprung onto the scene. However, amidst all this innovation, one thing remained constant: Content creation was both curated and centralized. With the advent of the internet and smartphones, social media was born. For the first time, content creation was no longer centralized. It was distributed. As such, gatekeepers — like studio heads or masthead editors — were no longer required. Crucially, however, social media platforms — like Meta or TikTok — did not share the spoils with the content creators. They kept all the revenues for themselves. This is beginning to change. Across industries — publishing, podcasting, esports, and education — content creators are finding ways to monetize their content directly with their fans. This new ecosystem is often called the creator economy. While it barely existed five years ago, today there are over 120 million content creators. In 2022, we expect the creator economy to generate about $60 billion of revenue per year with ~9% growth per year through 2024 when it may approach $75 billion of revenue. Around half of the revenues stem from ad-based video platforms, like YouTube. The other half is spread across a wide array of industries: publishing, education, and podcasting, among others. The creators do need help, and platforms can assist. However, the platforms charge fees that can vary from less than 10% of creator’s revenues (Patreon, Spotify, and Unity) to as high nearly 85% (Roblox). The variance often depends on the value the platform provides across five functions: (1) creation, (2) hosting, (3) distribution, (4) promotion, and (5) monetization. The more functions these platforms perform, the higher the fees. Today, the creator economy is diverse, vibrant, and growing. However, across many of the creator economy platforms, a similar pattern emerges. The lion’s share of the revenue is captured by a very small portion of the content creators. Far more than 80% of the revenues are created by far fewer than 20% of the creators. In short, the Pareto principle, or 80/20 rule, does not apply. The creator economy is “winner takes most.” Going forward, we think there are three areas worth watching. First, traditional social media firms may begin to share some of the spoils with content creators. That is, platforms like Twitter may begin to emulate YouTube’s business model. Or, as Instagram and Facebook push further into e-commerce, they will create opportunities for content creators to share in the economic spoils. Second, Web 3.0 may create opportunities for creator economy platforms to leverage augmented reality, blockchain, crypto, and NFTs to alter the economics of the creator economy. These tools can help facilitate a direct relationship between content creators and fans with a diminished role for digital intermediaries. In short, Web 3.0 may help improve the economics of content creators. Third, artificial intelligence may alter the creator economy in several ways including by helping with content creation and helping brands find the right influencer or helping consumer find the right content. It will be interesting to watch. With that, let’s dig into the details.

<p>For over 600 years, innovations spawned new forms of entertainment. The printing press (invented around 1436) unleashed book publishing. Later, radio and movies (1895), TV (1927), and video games (1958) sprung onto the scene. However, amidst all this innovation, one thing remained constant: Content creation was both curated and centralized.</p>
<p>With the advent of the internet and smartphones, social media was born. For the first time, content creation was no longer centralized. It was distributed. As such, gatekeepers &mdash; like studio heads or masthead editors &mdash; were no longer required. Crucially, however, social media platforms &mdash; like Meta or TikTok &mdash; did not share the spoils with the content creators. They kept all the revenues for themselves.&nbsp;</p>
<p>This is beginning to change. Across industries &mdash; publishing, podcasting, esports, and education &mdash; content creators are finding ways to monetize their content directly with their fans. This new ecosystem is often called the creator economy. While it barely existed five years ago, today there are over 120 million content creators. In 2022, we expect the creator economy to generate about $60 billion of revenue per year with ~9% growth per year through 2024 when it may approach $75 billion of revenue. Around half of the revenues stem from ad-based video platforms, like YouTube. The other half is spread across a wide array of industries: publishing, education, and podcasting, among others.</p>
<p>The creators do need help, and platforms can assist. However, the platforms charge fees that can vary from less than 10% of creator&rsquo;s revenues (Patreon, Spotify, and Unity) to as high nearly 85% (Roblox). The variance often depends on the value the platform provides across five functions: (1) creation, (2) hosting, (3) distribution, (4) promotion, and (5) monetization. The more functions these platforms perform, the higher the fees.</p>
<p>Today, the creator economy is diverse, vibrant, and growing. However, across many of the creator economy platforms, a similar pattern emerges. The lion&rsquo;s share of the revenue is captured by a very small portion of the content creators. Far more than 80% of the revenues are created by far fewer than 20% of the creators. In short, the Pareto principle, or 80/20 rule, does not apply. The creator economy is &ldquo;winner takes most.&rdquo;</p>
<p>Going forward, we think there are three areas worth watching. First, traditional social media firms may begin to share some of the spoils with content creators. That is, platforms like Twitter may begin to emulate YouTube&rsquo;s business model. Or, as Instagram and Facebook push further into e-commerce, they will create opportunities for content creators to share in the economic spoils.</p>
<p>Second, Web 3.0 may create opportunities for creator economy platforms to leverage augmented reality, blockchain, crypto, and NFTs to alter the economics of the creator economy. These tools can help facilitate a direct relationship between content creators and fans with a diminished role for digital intermediaries. In short, Web 3.0 may help improve the economics of content creators.</p>
<p>Third, artificial intelligence may alter the creator economy in several ways including by helping with content creation and helping brands find the right influencer or helping consumer find the right content. It will be interesting to watch. With that, let&rsquo;s dig into the details.</p>

From Central to Distributed <p>The rise of the internet and smartphones has shifted the supply of entertainment from being centrally produced to a distributed model. This means creators are no longer focusing on the largest, most lucrative markets but instead can serve micro-markets and niches, leading to a &ldquo;creator economy.&rdquo;</p> 

<p>The rise of the internet and smartphones has shifted the supply of entertainment from being centrally produced to a distributed model. This means creators are no longer focusing on the largest, most lucrative markets but instead can serve micro-markets and niches, leading to a &ldquo;creator economy.&rdquo;</p>

From Central to Distributed

Creator Utilize Services to Generate Revenue  <p>Monetization in the creator economy comes from ads, subscriptions, donations, purchases, and sponsorship. The generate revenues, creators need help and often use large platform so assist in creation, hosting, distribution, promotion, and monetization.</p> 

<p>Monetization in the creator economy comes from ads, subscriptions, donations, purchases, and sponsorship. The generate revenues, creators need help and often use large platform so assist in creation, hosting, distribution, promotion, and monetization.</p>

Creator Utilize Services to Generate Revenue 

Winner Takes Most  <p>Services fees charged for creator services vary greatly by platform. A creator&rsquo;s average net revenue is inversely proportional to the number of creators that use that platform, making the creator economy highly concentrated.</p> 

<p>Services fees charged for creator services vary greatly by platform. A creator&rsquo;s average net revenue is inversely proportional to the number of creators that use that platform, making the creator economy highly concentrated.</p>

Winner Takes Most 

Sizing the Creator Economy <p>The market for the creator economy is currently around $60 billion per year and should grow nearly 9% through 2024, when it should approach $75 billion. The largest segment of the creator economy is ad-based video. Some segments of the market &mdash; podcasts, education, mobile games, Metaverse, and publishing &mdash; are poised to grow 20% or more per year.</p> 

<p>The market for the creator economy is currently around $60 billion per year and should grow nearly 9% through 2024, when it should approach $75 billion. The largest segment of the creator economy is ad-based video. Some segments of the market &mdash; podcasts, education, mobile games, Metaverse, and publishing &mdash; are poised to grow 20% or more per year.</p>

Sizing the Creator Economy

For over 600 years, innovations spawned new forms of entertainment. The printing press (invented around 1436) unleashed book publishing. Later, radio and movies (1895), TV (1927), and video games (1958) sprung onto the scene. However, amidst all this innovation, one thing remained constant: Content creation was both curated and centralized. With the advent of the internet and smartphones, social media was born. For the first time, content creation was no longer centralized. It was distributed. As such, gatekeepers — like studio heads or masthead editors — were no longer required. Crucially, however, social media platforms — like Meta or TikTok — did not share the spoils with the content creators. They kept all the revenues for themselves. This is beginning to change. Across industries — publishing, podcasting, esports, and education — content creators are finding ways to monetize their content directly with their fans. This new ecosystem is often called the creator economy. While it barely existed five years ago, today there are over 120 million content creators. In 2022, we expect the creator economy to generate about $60 billion of revenue per year with ~9% growth per year through 2024 when it may approach $75 billion of revenue. Around half of the revenues stem from ad-based video platforms, like YouTube. The other half is spread across a wide array of industries: publishing, education, and podcasting, among others. The creators do need help, and platforms can assist. However, the platforms charge fees that can vary from less than 10% of creator’s revenues (Patreon, Spotify, and Unity) to as high nearly 85% (Roblox). The variance often depends on the value the platform provides across five functions: (1) creation, (2) hosting, (3) distribution, (4) promotion, and (5) monetization. The more functions these platforms perform, the higher the fees. Today, the creator economy is diverse, vibrant, and growing. However, across many of the creator economy platforms, a similar pattern emerges. The lion’s share of the revenue is captured by a very small portion of the content creators. Far more than 80% of the revenues are created by far fewer than 20% of the creators. In short, the Pareto principle, or 80/20 rule, does not apply. The creator economy is “winner takes most.” Going forward, we think there are three areas worth watching. First, traditional social media firms may begin to share some of the spoils with content creators. That is, platforms like Twitter may begin to emulate YouTube’s business model. Or, as Instagram and Facebook push further into e-commerce, they will create opportunities for content creators to share in the economic spoils. Second, Web 3.0 may create opportunities for creator economy platforms to leverage augmented reality, blockchain, crypto, and NFTs to alter the economics of the creator economy. These tools can help facilitate a direct relationship between content creators and fans with a diminished role for digital intermediaries. In short, Web 3.0 may help improve the economics of content creators. Third, artificial intelligence may alter the creator economy in several ways including by helping with content creation and helping brands find the right influencer or helping consumer find the right content. It will be interesting to watch. With that, let’s dig into the details. From Central to Distributed <p>The rise of the internet and smartphones has shifted the supply of entertainment from being centrally produced to a distributed model. This means creators are no longer focusing on the largest, most lucrative markets but instead can serve micro-markets and niches, leading to a &ldquo;creator economy.&rdquo;</p>  Creator Utilize Services to Generate Revenue  <p>Monetization in the creator economy comes from ads, subscriptions, donations, purchases, and sponsorship. The generate revenues, creators need help and often use large platform so assist in creation, hosting, distribution, promotion, and monetization.</p>  Winner Takes Most  <p>Services fees charged for creator services vary greatly by platform. A creator&rsquo;s average net revenue is inversely proportional to the number of creators that use that platform, making the creator economy highly concentrated.</p>  Sizing the Creator Economy <p>The market for the creator economy is currently around $60 billion per year and should grow nearly 9% through 2024, when it should approach $75 billion. The largest segment of the creator economy is ad-based video. Some segments of the market &mdash; podcasts, education, mobile games, Metaverse, and publishing &mdash; are poised to grow 20% or more per year.</p>   

Getting Creative and Growing

The internet and smartphones have changed content generation from a central model to one that's more distributed. This distributed model allows for more "niche" content to be produced, leading to a "creator economy." We find that net revenues to the creator are inversely related to the number of creators on a platform, making the creator economy highly concentrated. New tools and platforms utilizing Web 3.0 and AI could help creators increase their revenue.

The Creator Economy

Full Report

Executive Summary

Can you always spot disruptive innovation? When we hear the story of how the invention of the automobile hastened the demise of buggy whip companies, we often question why the disruptive potential of gas-powered cars wasn’t noticed. In the modern era, most people buying digital cameras in the 1990s would have scoffed at the idea that in a few years’ time, we would all be carrying around cameras in our mobile phones. The potential for tokenization via blockchain has been talked about as being transformative for the past few years but we are not quite at the point of mass adoption. Unlike automobiles or more recent innovations like ChatGPT or the Metaverse, blockchain is a back-end infrastructure technology without a prominent consumer interface, making it harder to visibly see how it could be innovative. But we believe we are approaching an inflection point, where the promised potential of blockchain will be realized and be measured in billions of users and trillions of dollars in value. Successful adoption will be when blockchain has a billion-plus users who do not even realize they are using the technology. This is likely to be driven by the adoption of central bank digital currencies (CBDCs) by large central banks as well as tokenized assets in gaming and blockchain-based payments on social media. By 2030, up to $5 trillion of CBDCs could be circulating in major economies in the world, half or which could be linked to distributed ledger technology. Tokenization of financial and real-work assets could be the killer use case driving blockchain breakthrough with tokenization expected to grow by a factor of 80x in private markets and reach up to almost $4 trillion in value by 2030. We first wrote about tokenization in the 2021 Citi GPS report Future of Money: CBDCs, Crypto, and 21st Century Cash. At the time, China was starting to pilot test its (CBDC) and other central banks were warming up to the idea of their own digital currencies. In recent months, central banks in multiple large countries have announced plans for CBDCs this decade, giving almost 2 billion people the opportunity to experiment with digital currency. To be successfully adopted into the mainstream, blockchain needs the help of technology enablers, including (1) decentralized digital identities, (2) zero-knowledge proofs, (3) Oracles, and (4) secure bridges. The legal plumbing also needs to be altered to enable smart legal contracts that will provide a whole new set of rails for global commerce and finance to run on. Regulatory considerations are also necessary to allow adoption and scalability without the hindering innovation. Although we think mass adoption could still be six to eight years away, momentum on adoption has positively shifted as governments, large institutions, and corporations have moved from investigating the benefits of tokenization to trials and proofs of concept.

<p><span style="font-size: 24px;">Can you always spot disruptive innovation? When we hear the story of how the invention of the automobile hastened the demise of buggy whip companies, we often question why the disruptive potential of gas-powered cars wasn&rsquo;t noticed. In the modern era, most people buying digital cameras in the 1990s would have scoffed at the idea that in a few years&rsquo; time, we would all be carrying around cameras in our mobile phones.</span></p>
<p>The potential for tokenization via blockchain has been talked about as being transformative for the past few years but we are not quite at the point of mass adoption. Unlike automobiles or more recent innovations like ChatGPT or the Metaverse, blockchain is a back-end infrastructure technology without a prominent consumer interface, making it harder to visibly see how it could be innovative.</p>
<p>But we believe we are approaching an inflection point, where the promised potential of blockchain will be realized and be measured in billions of users and trillions of dollars in value. Successful adoption will be when blockchain has a billion-plus users who do not even realize they are using the technology. This is likely to be driven by the adoption of central bank digital currencies (CBDCs) by large central banks as well as tokenized assets in gaming and blockchain-based payments on social media. By 2030, up to $5 trillion of CBDCs could be circulating in major economies in the world, half or which could be linked to distributed ledger technology. Tokenization of financial and real-work assets could be the killer use case driving blockchain breakthrough with tokenization expected to grow by a factor of 80x in private markets and reach up to almost $4 trillion in value by 2030.</p>
<p>We first wrote about tokenization in the 2021 Citi GPS report <a href="https://www.citigroup.com/global/insights/citigps/future-of-money" target="_blank" rel="noopener" data-link-source="tiny"><em>Future of Money: CBDCs, Crypto, and 21st Century Cash</em></a><em>. </em>At the time, China was starting to pilot test its (CBDC) and other central banks were warming up to the idea of their own digital currencies. In recent months, central banks in multiple large countries have announced plans for CBDCs this decade, giving almost 2 billion people the opportunity to experiment with digital currency.</p>
<p>To be successfully adopted into the mainstream, blockchain needs the help of technology enablers, including (1) decentralized digital identities, (2) zero-knowledge proofs, (3) Oracles, and (4) secure bridges. The legal plumbing also needs to be altered to enable smart legal contracts that will provide a whole new set of rails for global commerce and finance to run on. Regulatory considerations are also necessary to allow adoption and scalability without the hindering innovation.</p>
<p>Although we think mass adoption could still be six to eight years away, momentum on adoption has positively shifted as governments, large institutions, and corporations have moved from investigating the benefits of tokenization to trials and proofs of concept.</p>

Billions of Users <div>Blockchain user numbers will be boosted by daily activity. The success of blockchain adoption will be measured by when it is being used by a billion plus end users who do not even realize they are using the technology. Blockchain-based products can make a significant&nbsp;impact in terms of wide consumer adoption in digital currency, especially central bank digital currency (CBDCs), gaming, and social.</div>
<div>&nbsp;</div> 

<div>Blockchain user numbers will be boosted by daily activity. The success of blockchain adoption will be measured by when it is being used by a billion plus end users who do not even realize they are using the technology. Blockchain-based products can make a significant&nbsp;impact in terms of wide consumer adoption in digital currency, especially central bank digital currency (CBDCs), gaming, and social.</div>
<div>&nbsp;</div>

Billions of Users

Trillions in Value <div>Almost anything of value can be tokenized and tokenization of financial and real-world assets could be the &ldquo;killer use-case&rdquo;&nbsp;blockchain needs to drive a breakthrough. We forecast $4 trillion to $5 trillion of tokenized digital securities and $1 trillion of&nbsp;distributed ledger technology (DLT)-based trade finance volumes by 2030.</div> 

<div>Almost anything of value can be tokenized and tokenization of financial and real-world assets could be the &ldquo;killer use-case&rdquo;&nbsp;blockchain needs to drive a breakthrough. We forecast $4 trillion to $5 trillion of tokenized digital securities and $1 trillion of&nbsp;distributed ledger technology (DLT)-based trade finance volumes by 2030.</div>

Trillions in Value

Technology Enablers <div>Blockchain promises something that is in parts a replacement of a current functioning system and in parts new capabilities&nbsp;and operating models. From a technology specification perspective, blockchain needs to have transaction scale and throughput,&nbsp;strong guarantees of security, on-chain identity, privacy, Oracles, bridges, and good user experience.</div> 

<div>Blockchain promises something that is in parts a replacement of a current functioning system and in parts new capabilities&nbsp;and operating models. From a technology specification perspective, blockchain needs to have transaction scale and throughput,&nbsp;strong guarantees of security, on-chain identity, privacy, Oracles, bridges, and good user experience.</div>

Technology Enablers

Legal Enablers <div>Contract creation and execution can be a painful process, making it ripe for disruption. Technology-enabled smart&nbsp;legal contracts, are legally binding agreements with obligations performed automatically by a computer. They are&nbsp;dynamic, connect to outside data sources, and allow for human involvement where necessary.</div> 

<div>Contract creation and execution can be a painful process, making it ripe for disruption. Technology-enabled smart&nbsp;legal contracts, are legally binding agreements with obligations performed automatically by a computer. They are&nbsp;dynamic, connect to outside data sources, and allow for human involvement where necessary.</div>

Legal Enablers

Can you always spot disruptive innovation? When we hear the story of how the invention of the automobile hastened the demise of buggy whip companies, we often question why the disruptive potential of gas-powered cars wasn’t noticed. In the modern era, most people buying digital cameras in the 1990s would have scoffed at the idea that in a few years’ time, we would all be carrying around cameras in our mobile phones. The potential for tokenization via blockchain has been talked about as being transformative for the past few years but we are not quite at the point of mass adoption. Unlike automobiles or more recent innovations like ChatGPT or the Metaverse, blockchain is a back-end infrastructure technology without a prominent consumer interface, making it harder to visibly see how it could be innovative. But we believe we are approaching an inflection point, where the promised potential of blockchain will be realized and be measured in billions of users and trillions of dollars in value. Successful adoption will be when blockchain has a billion-plus users who do not even realize they are using the technology. This is likely to be driven by the adoption of central bank digital currencies (CBDCs) by large central banks as well as tokenized assets in gaming and blockchain-based payments on social media. By 2030, up to $5 trillion of CBDCs could be circulating in major economies in the world, half or which could be linked to distributed ledger technology. Tokenization of financial and real-work assets could be the killer use case driving blockchain breakthrough with tokenization expected to grow by a factor of 80x in private markets and reach up to almost $4 trillion in value by 2030. We first wrote about tokenization in the 2021 Citi GPS report Future of Money: CBDCs, Crypto, and 21st Century Cash. At the time, China was starting to pilot test its (CBDC) and other central banks were warming up to the idea of their own digital currencies. In recent months, central banks in multiple large countries have announced plans for CBDCs this decade, giving almost 2 billion people the opportunity to experiment with digital currency. To be successfully adopted into the mainstream, blockchain needs the help of technology enablers, including (1) decentralized digital identities, (2) zero-knowledge proofs, (3) Oracles, and (4) secure bridges. The legal plumbing also needs to be altered to enable smart legal contracts that will provide a whole new set of rails for global commerce and finance to run on. Regulatory considerations are also necessary to allow adoption and scalability without the hindering innovation. Although we think mass adoption could still be six to eight years away, momentum on adoption has positively shifted as governments, large institutions, and corporations have moved from investigating the benefits of tokenization to trials and proofs of concept. Billions of Users <div>Blockchain user numbers will be boosted by daily activity. The success of blockchain adoption will be measured by when it is being used by a billion plus end users who do not even realize they are using the technology. Blockchain-based products can make a significant&nbsp;impact in terms of wide consumer adoption in digital currency, especially central bank digital currency (CBDCs), gaming, and social.</div>
<div>&nbsp;</div>  Trillions in Value <div>Almost anything of value can be tokenized and tokenization of financial and real-world assets could be the &ldquo;killer use-case&rdquo;&nbsp;blockchain needs to drive a breakthrough. We forecast $4 trillion to $5 trillion of tokenized digital securities and $1 trillion of&nbsp;distributed ledger technology (DLT)-based trade finance volumes by 2030.</div>  Technology Enablers <div>Blockchain promises something that is in parts a replacement of a current functioning system and in parts new capabilities&nbsp;and operating models. From a technology specification perspective, blockchain needs to have transaction scale and throughput,&nbsp;strong guarantees of security, on-chain identity, privacy, Oracles, bridges, and good user experience.</div>  Legal Enablers <div>Contract creation and execution can be a painful process, making it ripe for disruption. Technology-enabled smart&nbsp;legal contracts, are legally binding agreements with obligations performed automatically by a computer. They are&nbsp;dynamic, connect to outside data sources, and allow for human involvement where necessary.</div>   

Blockchain's Next Billion Users and Trillions in Value

Can you always spot disruptive innovation? When we hear the story of how the invention of the automobile hastened the demise of buggy whip companies, we often question why the disruptive potential of gas-powered cars wasn’t noticed.

Money, Tokens, and Games

Digital Money Symposium 2023

With Antony Jenkins, CEO & Founder, 10xBankingin conversation with Emily Turner, Head of Business Development, Citi Institutional Clients Group, Citi

Reinventing Finance

Dara Tarkowski, Managing Partner, Actuate Law in conversation with Nimrod Barak, Global Head of Innovation Labs, Citi

The Rise of ChatGPT: AI Gamechanger for Finance?

Jonathan Larsen, Chief Innovation Officer Ping An Group in conversation with Emily Turner, Head of Business Development, Citi Institutional Clients Group, Citi

Building a Fintech and Healthcare Focused Venture Fund

Digital Money Symposium 2023 

Fabienne Babinsky, Head of Financial Sector Intelligence and Innovation, UN World Food Program and Shane O’Connor, Innovation Manager, Ventures, UNICEF in conversation with Esther Chibesa, Co–Head Treasury & Trade Solutions EMEA Emerging Markets, Citi

Fintech’s Role in Development and Sustainability

Ryan Rugg, Global Head of Digital Assets, Treasury and Trade Solutions, Citi in conversation with Anuj Gangahar, Director, Citi Global Insights 

Digital Identity 

Jeff Tijssen, Expert Partner and Global Head of FinTech, Bain & Company in conversation with Gülru Atak, Head of Franchise Growth & Incubation, Citi

Is Embedded Finance the End of Traditional Banking?

Digital Money Symposium

Ruti Ben-Shlomi, CEO, LightSolver in conversation with Jason Engelbrecht, Head of Innovation Lab, Citi

The Quantum Frontier

Citi's 10th Annual Digital Money Symposium took place in London on 30 March 2023 - Click the image above to watch the video highlights! This flagship event brought together various practitioners in the FinTech and digital money ecosystem including thought-leaders, academics, corporates, policy makers and the rising stars of the FinTech world. See below for some interviews with the speakers and also the GPS reports that were launched at the event. For more information on the event, speakers or to watch replay of the panel sessions Click Here.

<p style="margin: 1em 0px; padding: 0px; border-width: 0px; font-stretch: inherit; font-size: 12px; line-height: inherit; font-optical-sizing: inherit; font-kerning: inherit; font-feature-settings: inherit; font-variation-settings: inherit; vertical-align: baseline; background-color: #ffffff;"><span style="font-size: 24px;">Citi's 10th Annual Digital Money Symposium took place in London on 30 March 2023 - Click the image above to watch the video highlights!</span></p>
<p style="margin: 1em 0px; padding: 0px; border-width: 0px; font-stretch: inherit; font-size: 12px; line-height: inherit; font-optical-sizing: inherit; font-kerning: inherit; font-feature-settings: inherit; font-variation-settings: inherit; vertical-align: baseline; background-color: #ffffff;"><span style="font-size: 24px;">This flagship event brought together various practitioners in the FinTech and digital money ecosystem including thought-leaders, academics, corporates, policy makers and the rising stars of the FinTech world.</span></p>
<p style="margin: 1em 0px; padding: 0px; border-width: 0px; font-stretch: inherit; font-size: 12px; line-height: inherit; font-optical-sizing: inherit; font-kerning: inherit; font-feature-settings: inherit; font-variation-settings: inherit; vertical-align: baseline; background-color: #ffffff;"><span style="font-size: 24px;">See below for some interviews with the speakers and also the GPS reports that were launched at the event.&nbsp;</span></p>
<p style="margin: 1em 0px; padding: 0px; border-width: 0px; font-stretch: inherit; font-size: 12px; line-height: inherit; font-optical-sizing: inherit; font-kerning: inherit; font-feature-settings: inherit; font-variation-settings: inherit; vertical-align: baseline; background-color: #ffffff;">&nbsp;</p>
<p style="margin: 1em 0px; padding: 0px; border-width: 0px; font-stretch: inherit; font-size: 12px; line-height: inherit; font-optical-sizing: inherit; font-kerning: inherit; font-feature-settings: inherit; font-variation-settings: inherit; vertical-align: baseline; background-color: #ffffff;"><span style="font-size: 24px;">For more information on the event, speakers or to watch replay of the panel sessions <a href="https://www.citibank.com/icg/sa/digital_symposium/2023/index.html" data-link-source="tiny">Click Here</a>.</span></p>
<p style="margin: 1em 0px; padding: 0px; border-width: 0px; font-stretch: inherit; font-size: 12px; line-height: inherit; font-optical-sizing: inherit; font-kerning: inherit; font-feature-settings: inherit; font-variation-settings: inherit; vertical-align: baseline; background-color: #ffffff;">&nbsp;</p>
<p style="margin: 1em 0px; padding: 0px; border-width: 0px; font-stretch: inherit; font-size: 12px; line-height: inherit; font-optical-sizing: inherit; font-kerning: inherit; font-feature-settings: inherit; font-variation-settings: inherit; vertical-align: baseline; background-color: #ffffff;">&nbsp;</p>

10 Year Anniversary 

This flagship event bought together various practitioners in the FinTech and digital money ecosystem including thought-leaders, academics, corporates, policy makers and the rising stars of the FinTech world.

Citi's 10th Digital Money Symposium 2023

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