Moody's: U.S. Banks Project Digital Finance Transformation to Accelerate, Tokenization to Expand

According to Moody’s report released May 14, based on discussions with major U.S. banks and financial market intermediaries, most institutions expect digital finance transformation to unfold gradually with accelerating momentum, with tokenization scaling progressively across more market participants, assets, and use cases. Currently, tokenization activity is concentrated in cryptocurrency trading, cross-border retail payments, and select institutional use cases, though nearly all large banks have established digital asset teams or innovation divisions actively participating in industry pilots.

Moody’s outlined three possible scenarios: a baseline scenario where tokenization expands in stablecoins and tokenized deposits with incumbent asset managers, banks, and infrastructure providers maintaining core positions; a low-growth scenario where regulatory friction and unresolved legal issues constrain adoption to niche use cases; and a disruptive scenario where stablecoins become widely adopted as on-chain settlement options, pressuring payment processors and correspondent banks’ revenues.