Tokenization Gains Momentum Amid Regulatory Clarity

Recent years have seen significant growth in digital assets as they transition from proof of concept to mainstream financial infrastructure. This shift is driven by three primary forms of digital assets: decentralized crypto-assets, such as Bitcoin and Ethereum; tokenized money, which includes stablecoins, tokenized deposits, and central bank digital currencies; and traditional assets converted into digital tokens on blockchain.

Tokenized money has gained traction in recent years, with stablecoins emerging as a credible tool for payments, treasury/liquidity management, and settlement. However, their adoption is still limited, with less than 1% of overall transaction volume corresponding to real-economy payments in 2025, according to Boston Consulting Group's white paper.

The potential benefits of tokenization are substantial, including increased efficiency, programmability, and liquidity for financial institutions. A report by the Global Financial Markets Association highlights how DLT could generate efficiencies across the trade lifecycle, with a global bank handling $100bn in daily repo volumes potentially saving $150-300m by reducing idle collateral and achieving faster settlement.

Regulatory developments are also driving momentum behind digital assets, with the EU's MiCA regulation providing clarity for financial institutions. The GENIUS act in the US will establish rules for payment stablecoins from January 2027, while the CLARITY act would create a broader legal framework for digital assets if approved by the Senate.