CBDCs seen as a core element in transition to shorter settlement cycles, with increasing year-on-year support
According to a report published by Cointelegraph, CitiBank's latest Securities Services Evolution whitepaper reveals that 87% of the 483 global securities firms surveyed view central bank digital currencies (CBDCs) as a viable option for enabling shorter settlement cycles by 2026. The year-on-year support for digital cash has grown in tandem with ongoing CBDC pilots and cross-border initiatives in various jurisdictions.
As countries such as the United States, Canada, and India move toward T+1 settlement cycles, distributed ledger technology (DLT), CBDCs, and stablecoins emerge as vital elements in speeding up the transition. However, regulatory uncertainties, limited knowledge, backward compatibility with traditional financial systems, and blockchain interoperability remain significant challenges in adopting digital assets.
Institutional investors, banks, and asset managers are seen as pivotal in bringing market-wide solutions and enabling widespread adoption of CBDCs, stablecoins, and other centrally governed financial instruments. By 2028, CitiBank envisions financial aspirations evolving beyond T+1, with the mainstream adoption of DLTs, shorter settlement cycles, digital cash-based funding mechanisms, and the removal of core banking systems.