Interoperability is becoming the infrastructure layer of digital finance
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A new joint whitepaper from Citi, DTCC and Swift points to a clear shift in digital finance: the industry is moving beyond isolated tokenization projects toward infrastructure that connects digital assets, new settlement rails and the banking systems already in place.
For banks, the question is increasingly no longer whether financial assets can be tokenized. The technology has already moved well beyond that point.
The harder question is how tokenized assets and digital money can operate across institutions, networks and jurisdictions while remaining connected to the infrastructure banks already use.
That is the central argument of The Connective Tissue of Digital Finance, a September 2026 whitepaper co-authored by Citi, DTCC and Swift. The paper describes interoperability as a prerequisite for moving digital finance from individual implementations to institutional scale.
From tokenization to connectivity
Over the past several years, financial institutions have built new blockchain networks, tokenization platforms and digital settlement capabilities. But these systems increasingly need to work together.
A bank may interact with tokenized securities on one infrastructure, tokenized deposits on another and conventional accounts and payment rails elsewhere. Each component can work independently, but the real value emerges when liquidity, assets and information can move between them efficiently.
The whitepaper argues that the next major infrastructure challenge is therefore not simply tokenizing additional assets, but enabling interoperability across the financial system.
For banks, this has an important implication: digital finance cannot become another isolated operational environment.
Extending banking infrastructure instead of replacing it
One of the strongest themes in the report is backwards compatibility.
The goal is not to create an entirely separate financial system that requires institutions to operate new wallets, nodes, key-management environments and accounting processes alongside their existing infrastructure.
Instead, digital capabilities need to become an extension of the systems banks already trust and operate.
The authors describe the direction of travel as making the existing financial system more programmable, continuous and connected, supported by common standards and interoperable infrastructure.
This is also the principle behind DCM’s Side-Core banking platform.
Rather than asking a bank to replace its core infrastructure, Side-Core operates alongside it, providing a layer through which institutions can connect existing banking environments with blockchain-based settlement and programmable financial products.
The objective is not blockchain adoption for its own sake. It is enabling new financial capabilities without forcing banks to rebuild what already works.
Standards become part of the strategy
Interoperability is not only about connecting blockchains.
It also means connecting new infrastructure to the messaging, compliance and operational standards already embedded in global banking.
The whitepaper highlights Swift’s blockchain-based shared ledger as an example. Built using Hyperledger Besu and ISO 20022 messaging, the infrastructure is designed to support 24/7 use of tokenized deposits for interbank transactions while allowing institutions to continue operating within familiar banking standards and infrastructure.
For this reason, standards such as ISO 20022 are becoming a strategic bridge between on-chain settlement and existing banking operations, rather than simply a messaging specification.
The more digital infrastructure can integrate with established standards, the lower the operational barrier to institutional adoption.
Tokenized deposits are emerging as an institutional form of digital money
The settlement layer itself is also evolving.
The report expects stablecoins, tokenized deposits and CBDCs to coexist, serving different market structures and use cases rather than converging into a single form of digital money.
For regulated financial institutions, however, tokenized deposits have a particularly important role.
Unlike stablecoins, they represent claims on deposits issued by regulated banks and remain connected to existing capital, compliance, balance-sheet and risk frameworks.
That makes them particularly relevant for institutional applications such as intraday liquidity, collateral movement and securities settlement.
The opportunity is therefore not simply to put bank money on-chain.
It is to make commercial bank money programmable and available across new settlement environments without separating it from the banking framework around it.
The value is operational, not technological
Ultimately, institutional adoption will depend less on the novelty of the underlying technology and more on the operational improvements it delivers.
The whitepaper highlights benefits including continuous liquidity movement, more efficient collateral management, synchronized settlement and programmable workflows. In one example, tokenized deposits allow liquidity to move when a business need arises rather than waiting for traditional settlement windows to reopen.
This is an important shift in how blockchain infrastructure should be discussed.
The value proposition for banks is not simply blockchain.
It is:
- 24/7 settlement.
- Programmable money.
- Interoperability.
- Operational continuity.
- More efficient liquidity
- and collateral management.
Blockchain is the enabling infrastructure underneath those outcomes.
The next phase of digital finance
Citi Institute’s Tokenization 2030 research, cited in the whitepaper, projects a tokenized asset market of approximately $5.5 trillion by 2030 in its base-case scenario.
But that projection depends on several conditions: settlement money being available on-chain, financial infrastructures becoming connected, regulatory frameworks being navigable and clients being able to access digital assets through their existing banking relationships.
That may ultimately be the most important takeaway.
The next stage of digital finance will not be defined only by how many assets move on-chain.
It will be defined by how effectively digital and traditional financial infrastructure can operate as one connected system.
For banks, that means the path forward is increasingly not about replacing the infrastructure they already have.
It is about extending it.
For financial institutions, the challenge is increasingly clear: how to introduce tokenized money, programmable settlement and new digital rails without creating another disconnected layer of infrastructure.
DCM helps banks bridge that gap.
Explore how DCM Side-Core connects existing banking infrastructure with the next generation of digital financial rails.
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