Blockchain adoption reshapes capital markets and boosts GDP

In a new report, Citizens argues that blockchain adoption could play a significant role in accelerating global GDP growth by transforming financial infrastructure.

Citizens outlines the economic case for blockchain

American bank Citizens said blockchain technology could accelerate global GDP by stripping out what its analysts call the “friction tax” in payments, settlement, recordkeeping and ownership verification.

Moreover, the bank’s analysts said these efficiencies could increase capital efficiency throughput across markets and support higher economic output without requiring a proportional rise in balance sheet size.

“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.

From pilots to production in global capital markets

The report argued that the adoption of blockchain is shifting from experimentation to real-world deployment, as major institutions move onchain and embed the technology in critical processes.

In particular, the bank’s analysts pointed to a wave of large players putting onchain infrastructure production systems into live use, rather than keeping projects in pilot phases.

They highlighted the New York Stock Exchange plan to launch a tokenized securities platform that would support around the clock markets and 24/7 trading of U.S. equities and exchange-traded funds (ETFs) with near instant settlement, pending regulatory approval.

However, this shift is not only about new technology launches. The move signals that incumbent market operators are integrating blockchain into core systems to capture emerging opportunities and fend off future disruption, the analysts said.

Faster capital velocity and balance sheet relief

The Citizens report said blockchain’s initial macroeconomic impact would appear through faster capital velocity and more efficient use of existing assets.

According to the analysts, 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.

Moreover, by compressing settlement cycles and automating post-trade processes, blockchain technology adoption could lower operational costs for intermediaries and increase liquidity in key asset classes.

Tokenization and the expanding investable universe

Over time, the report 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 also new asset classes tied to the digital economy, alongside more efficient, onchain collateral for lending and other financial activities.

Tokenization is the process by which real-world assets are converted into blockchain-based tokens, enabling fractional ownership, programmatic controls and faster transferability across digital marketplaces.

Furthermore, the analysts said the combination of stablecoins and tokenization could support new payment and settlement models, as governments and incumbents explore ways to modernize legacy financial infrastructure.

Supporting a digital, AI-driven economy

The report argued that blockchain technology aligns closely with an increasingly digital, AI-driven economy that depends on real-time data and trusted transaction records.

As automation drives growth in machine-initiated transactions, the bank said that always-on, programmable blockchain rails are well suited to support rising demands for real-time settlement, authentication and auditability at scale.

In this context, Citizens suggested that blockchain adoption may become a foundational pillar for financial systems that must operate 24/7 and interconnect humans, institutions and autonomous agents.

Overall, the Tuesday report from Citizens frames the technology’s progress as a shift from isolated pilots to integrated market infrastructure, with potential long-term benefits for capital markets, economic growth and global GDP.