Introduction
Blockchain technology and digital assets have moved from the speculative fringe of finance into the institutional mainstream. Stablecoin supply crossed $300 billion in late 2025 and has held around that level through 2026. a16z's State of Crypto 2025 report counted $46 trillion of stablecoin transfers over the prior 12 months, or about $9 trillion after stripping out bot activity, still more than half of Visa's volume. Tokenized real-world assets (excluding stablecoins) have grown from about $15 billion at the end of 2024 to nearly $40 billion. For FIG bankers, digital assets generate deal flow through M&A (Stripe's $1.1 billion acquisition of Bridge, Mastercard's purchase of BVNK for up to $1.8 billion), capital markets (Circle's June 2025 IPO, crypto exchange listings), regulatory strategy (charter applications, compliance frameworks), and structured products (tokenized fund vehicles, digital asset custody).
The GENIUS Act, signed on July 18, 2025, created the first US federal regulatory framework for stablecoins, bringing them within the regulated financial system. This milestone, combined with the EU's Markets in Crypto-Assets (MiCA) regulation and Hong Kong's stablecoin licensing regime (in force since August 2025), signals that digital assets are being integrated into, rather than excluded from, the global financial regulatory architecture.
Stablecoins: The Bridge Between Crypto and Traditional Finance
Stablecoins are digital tokens pegged to a fiat currency (almost entirely the US dollar), designed to maintain a stable value while operating on blockchain rails. The stablecoin market is dominated by two issuers:
Tether (USDT): roughly $180 billion in circulation, about 60% of the stablecoin market. USDT is the most traded digital asset in the world and serves as the primary settlement and liquidity token across cryptocurrency exchanges globally.
Circle (USDC): roughly $72 billion in circulation, about a quarter of the stablecoin market. USDC is the regulated US-centric stablecoin, with Circle positioning itself as the compliant institutional alternative to Tether. USDC's supply grew roughly twice as fast as USDT's in 2025, reflecting institutional preference for regulated stablecoin issuers.
Treasury Secretary Scott Bessent has projected that the market could grow roughly tenfold to about $3 trillion by 2030, driven by demand for dollar-denominated digital payment rails in international trade, remittances, and cross-border settlement. Because reserves sit largely in short-dated Treasury bills, Treasury also views stablecoin issuers as a growing source of demand for government debt.
- Stablecoin
A digital asset designed to maintain a stable value relative to a reference currency (typically the US dollar) by holding reserves of cash, cash equivalents, or short-term Treasury securities at least equal to the tokens outstanding. Unlike Bitcoin or Ethereum, stablecoins function as digital dollars that move on blockchain networks 24/7 with near-instant settlement. They serve three primary functions: (1) settlement infrastructure for crypto trading, (2) cross-border payment rails that compete with correspondent banking and card networks, and (3) dollar-access tools in countries with unstable local currencies. The GENIUS Act requires 1:1 reserves in cash, deposits and short-dated Treasuries, monthly public reserve reports, and federal oversight once a state-supervised issuer passes $10 billion outstanding.
The GENIUS Act: Federal Stablecoin Regulation
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, signed into law on July 18, 2025, created the first comprehensive US federal regulatory framework for payment stablecoins. Only permitted issuers (bank subsidiaries, OCC-licensed nonbanks, or state-qualified issuers) may offer them to US persons. Key provisions:
Reserve requirements: issuers must back every token 1:1 with US dollars, demand deposits at insured banks, Treasury bills maturing within 93 days, Treasury-backed repos, or government money market funds, and must redeem at par.
Tiered oversight: bank-affiliated issuers answer to their primary federal regulator, and the OCC licenses and supervises nonbank federal issuers. State-qualified issuers can stay under a comparable state regime only up to $10 billion outstanding; above that, they must move to federal supervision within 360 days unless the OCC grants a waiver.
Audit and disclosure: monthly public reports on reserve composition, examined by a registered public accounting firm and certified by the CEO and CFO, plus annual audited financial statements for issuers above $50 billion outstanding.
No yield to holders: issuers cannot pay interest or yield solely for holding a stablecoin, which keeps payment stablecoins from competing head-on with bank deposits as a savings product.
Restrictions on foreign issuers: after a three-year phase-in, US platforms may only offer stablecoins from permitted issuers or from foreign issuers in comparably regulated jurisdictions that register with the OCC.
The OCC issued the first federal final rule implementing the GENIUS Act on October 21, 2026, effective January 18, 2027, when the statute itself takes effect. It details reserve, redemption, custody and capital requirements for OCC-supervised issuers, with anti-money-laundering rules to follow separately; the FDIC and Federal Reserve have proposed parallel rules for their banks.
The GENIUS Act effectively brings stablecoins into the regulated financial system, creating clarity that institutional participants (banks, payment companies, asset managers) need to build stablecoin-based products and services. The charter and licensing choices this creates are covered in FinTech and Payments Regulation.
Tokenized Real-World Assets (RWAs)
After stablecoins, tokenization is the next institutional application of blockchain technology, and the one asset managers care most about.
- Real-World Asset (RWA) Tokenization
The issuance of blockchain tokens that represent legal ownership of, or a claim on, a traditional asset such as a Treasury bill, money market fund share, private credit loan, or real estate interest. The token records ownership and transfers on a distributed ledger, while the underlying asset stays with a custodian, transfer agent, or fund administrator. Market trackers count stablecoins separately because they are payment instruments rather than claims on an investment portfolio.
Tokenized RWAs (excluding stablecoins) were about $15 billion at the end of 2024 and have since climbed to nearly $40 billion, with Treasury products the largest category.
Tokenized Treasuries: tokenized money market and Treasury funds now hold roughly $15 billion. BlackRock's BUIDL (USD Institutional Digital Liquidity Fund), launched in March 2024, passed $500 million within four months and became the category's flagship; it now sits at around $2 billion, alongside Circle's USYC and Ondo's USDY.
Tokenized real estate: Deloitte's Center for Financial Services forecasts that tokenized real estate will grow from less than $300 billion in 2024 to $4 trillion by 2035, a 27% CAGR. Most of that value would sit in tokenized loans, securitizations, and private real estate funds rather than fractional slices of individual buildings.
Tokenized private credit: private credit managers are exploring tokenization as a mechanism to broaden investor access to direct lending portfolios, reduce minimum investment sizes, and create secondary market liquidity for traditionally illiquid assets.
| Asset Class | Latest Size | Outlook |
|---|---|---|
| Stablecoins | ~$300B supply (2026) | ~$3T by 2030 (Bessent) |
| Tokenized Treasuries | ~$15B (2026) | Rapid institutional adoption |
| Tokenized real estate | <$300B (2024, Deloitte) | $4T by 2035 (Deloitte) |
| Total RWA (ex-stablecoins) | ~$40B (2026), from $15B (2024) | Led by Treasuries and private credit |
The tokenization opportunity is driving institutional investment in blockchain infrastructure. Goldman Sachs launched its Digital Assets Platform to enable institutional tokenization. JPMorgan says its Kinexys platform (formerly Onyx) now averages more than $7 billion in daily transaction volume across its blockchain-based payment and settlement rails. Franklin Templeton's tokenized money market fund (BENJI) was among the first mutual funds to use blockchain for share recording.
The EU's Markets in Crypto-Assets (MiCA) regulation applied its stablecoin rules from June 30, 2024 and took full effect on December 30, 2024, making Europe the first major jurisdiction with comprehensive crypto regulation covering asset-referenced tokens (stablecoins backed by multiple assets), e-money tokens (stablecoins pegged to a single fiat currency), and crypto-asset service provider licensing. The grandfathering window for existing crypto firms ended on July 1, 2026, after which any provider serving EU clients without MiCA authorization must stop. Circle obtained an e-money license in France in July 2024 to issue under MiCA, positioning USDC as the leading regulated stablecoin across both US and EU markets. Together, the GENIUS Act and MiCA are setting the template for how institutions deploy stablecoin infrastructure across jurisdictions.
The unresolved risks create a bifurcated landscape: regulated products (stablecoins under GENIUS Act/MiCA, tokenized Treasuries, exchange-traded products) are attracting institutional capital, while unregulated segments (DeFi protocols, offshore exchanges, speculative tokens) still carry elevated counterparty and operational risk. FIG analysts should therefore judge each product category on its technological utility and regulatory maturity rather than treating "crypto" as a monolithic asset class.
Digital assets have crossed the threshold from speculative experiment to institutional infrastructure. The roughly $300 billion stablecoin market, the GENIUS Act and MiCA, and the entry of BlackRock, JPMorgan, Stripe, and Mastercard make them a permanent part of the financial system. For FIG professionals, fluency in stablecoin regulation, tokenization structures, and payments-crypto convergence is becoming as essential as understanding traditional banking, insurance, and asset management business models.
