In 2025, the digital asset market extended gains as institutionalisation gathered pace, led by the United States.

Stablecoin enthusiasm in particular rocked markets at home and abroad. Industry moves continued to use stablecoins in real-world financial markets beyond cryptocurrencies. Stablecoins rapidly emerged as a major issue across the broader digital finance landscape.

As institutionalisation advanced, traditional financial firms also moved faster with steps targeting cryptocurrencies. Various efforts to merge blockchain with traditional finance, starting with tokenised government bonds and extending to tokenised deposits, drew attention.

U.S. digital industry policy leads market uptrend

On the policy front, the biggest issue in the 2025 digital asset market was the arrival of Donald Trump’s second administration, which championed pro-cryptocurrency policies, and the passage in the United States of the GENIUS Act centred on stablecoin regulation.

The U.S. digital asset market transparency bill, CLARITY, is also expected to pass early next year.

With expectations that deregulation and institutionalisation would spread under the Trump government, the cryptocurrency market also posted growth. It turned to a downtrend after October, but overall the cryptocurrency market enjoyed a boom in 2025. Bitcoin broke through $120,000 in July. Major altcoins such as Ethereum (ETH) also sustained gains.

In South Korea, moves related to digital asset institutionalisation made some progress, but fell short of market expectations.

The implementation of the Virtual Asset User Protection Act led relatively quickly to the establishment of segregated custody of exchange assets and stronger internal controls. A phased roadmap to allow corporate investment was also presented. Some constraints that had acted as "shadow regulation" were eased.

But discussions on the Digital Asset Basic Act, known as second-stage legislation, remain stalled. Disagreements among ministries over the issuer, supervisory authority and the central bank’s role also continued, without narrowing differences over stablecoin institutionalisation.

Flood of stablecoins becomes a major variable in global financial markets

After the passage in the United States of the GENIUS Act, a stablecoin regulatory bill, a wave of entities entered or prepared to enter the stablecoin market, spanning both crypto and non-crypto sectors.

The dollar stablecoin market has already been reshaped into a race among dozens of companies. More recently, U.S. state governments have also begun issuing stablecoins.

Total stablecoin supply stood at about $310 billion as of mid-December, up more than 50 percent from the start of the year, according to DeFi data platform DefiLlama.

Competition among issuers for leadership also intensified. Circle introduced its own layer-1 chain, Arc, and Stripe launched Tempo with VC firm Paradigm. Tether pursued a multichain strategy with Stable Chain and USDT0. Wallets such as MetaMask and Phantom also joined the race by launching dedicated stablecoins.

Corporate support also spread. PayPal’s PYUSD grew to a scale of several billion dollars, and major fintech firms such as Shopify, Klarna, Visa and Mastercard are introducing stablecoin settlement features or pursuing pilot programmes. Visa and Mastercard are both accelerating efforts overseas to expand crypto payment businesses and are also active in related acquisitions and investments. This is seen as a response to the spread of stablecoins in developing countries and a move to address efforts to bypass existing credit card networks using cryptocurrencies.

Moves by traditional financial firms toward stablecoins also stood out. Sony Bank, under Sony Financial Group, plans to issue a U.S. dollar-pegged stablecoin in the United States starting in fiscal 2026. Sony appears to aim to use the stablecoin as a payment method for content within its ecosystem. It aims in particular to enable U.S. customers to use the stablecoin instead of credit cards to buy video games, animation and subscription services.

The dollar stablecoin market has long been led by a one-two punch of Tether and Circle. Their combined market share is around 80 percent. Attention is focused on what variables the moves by major companies entering the stablecoin arena may bring to that landscape.

Watch the convergence of blockchain and finance

In 2026, moves by traditional financial companies are expected to draw particular attention in digital assets.

Traditional financial institutions have maintained a "debanking" practice of excluding crypto firms due to AML and reputational risks, but recently they have been expanding connections between traditional finance and digital assets. This trend is expected to continue next year.

The tokenised U.S. Treasury market, which was under $200 million in January 2024, grew more than 50-fold to nearly $7 billion by the end of 2025. This expansion accelerated alongside rising interest among institutional investors in on-chain yields.

A representative example is BlackRock’s BUIDL (USD Institutional Digital Liquidity Fund), which invests in short-term U.S. Treasuries and provides on-chain settlement functions that offer daily returns. BUIDL currently manages about $2 billion in assets, while Circle’s USYC (USD Coin Yield), Superstate’s U.S. Treasury token (USTB) and Ondo Finance’s short-term U.S. government bond fund (OUSG) are also expanding the market.

Beyond tokenised Treasuries, financial institutions are also moving faster on tokenised deposits, which are digital versions of bank deposits issued on blockchains.

JPMorgan rebranded its blockchain unit as Kinexys in 2024 and expanded it into a payments and liquidity management platform rather than a simple cryptocurrency project. Citigroup also announced Citi Token Services and integrated tokenised deposits into the financial system. JPMorgan also introduced a JPM Coin system for institutional customers. JPM Coin is a deposit token on blockchain-based infrastructure that enables real-time, 24-hour transfers.

HSBC will also introduce tokenised deposits in the United States and the United Arab Emirates in 2026.