The pace of banks’ efforts to tokenize assets falls short of initial expectations.

Banks, long engaged in discussions about the creation of ‘tokenized’ versions of assets such as bonds and currencies, report that the transition to blockchain-based trading is progressing slower than anticipated. Some investors remain cautious about the concept.

The concept involves creating tokenized assets—typically blockchain-based tokens representing ownership of traditional assets like currencies or bonds—with the aim of streamlining trading processes, reducing costs, and enhancing transparency regarding ownership. Consultants and digital asset experts foresee a substantial portion of global assets being tokenized through blockchain technology. HSBC and Northern Trust projected in a previous note that 5% to 10% of all assets could be tokenized by 2030.

However, executives speaking at the Money20/20 fintech conference this week noted that the shift to digital asset versions is advancing at a sluggish pace. Ryan Rugg, Head of Digital Assets at Citibank’s trade and treasury solutions business, expressed surprise at the slower progress, stating that while experiments have been conducted with money markets and bonds, there are no live and scalable applications currently. The only active application mentioned is a tokenized deposit.

Despite the delays, Rugg maintains optimism about tokenization, particularly regarding the creation of a tokenized deposit capable of being transferred 24/7, 365 days a year, circumventing time zone limitations and banking holidays. Rugg noted that client demand for such solutions exists, and the tokenized deposit has been operational since last year.