American bank Citizens said blockchain technology could accelerate global GDP by stripping out the “friction tax” in payments, settlement, recordkeeping and ownership verification.
"We believe blockchain adoption can support economic expansion driven by faster velocity and recirculation of capital; a larger and more innovative investable universe; and infrastructure that better matches the demands of an increasingly digital, AI-enabled world," analysts led by Devin Ryan said in the Tuesday report.
The bank's analysts pointed to a wave of major institutions putting on-chain infrastructure into production. They highlighted the New York Stock Exchange’s plan to launch a tokenized securities platform that would support 24/7 trading of U.S. equities and exchange-traded funds (ETFs) with near-instant settlement, pending regulatory approval.
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This move signals that incumbent market operators are integrating blockchain into core systems to capture new opportunities and fend off disruption, the analysts said.
Blockchain’s economic impact will show up first through faster capital velocity, the report argued. Around-the-clock markets and near–T+0 settlement can reduce trapped collateral and counterparty risk, freeing balance sheets and allowing the same pool of capital to support more real economic activity.
Over time, the analysts said tokenization can expand the investable universe by making it economical to issue, trade and finance assets that are currently illiquid or operationally complex. That includes not only traditional securities, but new asset classes tied to the digital economy, alongside more efficient, onchain collateral for lending.
Tokenization is the process by which real-world assets are converted into blockchain-based tokens.
Blockchain technology aligns with an increasingly digital, AI-driven economy.
As automation drives growth in machine-initiated transactions, the bank argued that always-on, programmable blockchain rails are well suited to support rising demands for real-time settlement, authentication and auditability at scale.
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