Crypto’s Maturing Market: Four Key Trends for 2025
2024 marked a resurgence for cryptocurrency, with Bitcoin reaching new heights and the industry demonstrating its growing maturity. This year saw Bitcoin’s packaging into exchange-traded funds (ETFs) offered by major investment companies, solidifying its place in the financial landscape. Innovations have broadened the technology’s appeal beyond crypto enthusiasts. As we venture into 2025, the integration of blockchain technology into traditional finance will be a defining trend, addressing some of the economy’s most persistent challenges.
At Mastercard, we’ve long championed the importance of security, trust, and ease of use for blockchain’s full potential to be realized. If these elements are prioritized, it will lead to increased adoption of blockchain technologies from fintechs and financial institutions alike, creating impactful use cases for millions of people. The tokenization of both money and assets on blockchain networks is already underway, driven by the desire to improve efficiency and reduce costs in everyday transactions. With a shift expected in the regulatory landscape, driven by these technological advancements, as well as the needs of consumers, businesses, banks, and the economy, several key areas are worth watching in the coming year.
1. The Rise of Stablecoins and Tokenized Deposits
Both stablecoins and tokenized deposits are poised to find their place in the financial ecosystem. According to a 2023 report from the Federal Reserve, American banks hold nearly $18 trillion in commercial bank deposits. To provide this money with the latest fintech advances, banks are experimenting with tokenized deposits, which are tokens on a blockchain that represent a deposit on a bank’s own ledger. This is done to speed up transactions and enable programmable payments.
Stablecoins, backed by fiat currency, have gained traction in payments and remittance. The clearer regulatory framework that is expected to emerge will make stablecoins safer and attract more participants. The future likely holds a coexistence of tokenized commercial bank deposits and stablecoins, with transactions beginning with tokenized money in bank accounts and settled through stablecoins.
2. Regulatory Clarity Driving Digital Asset Adoption
Greater clarity in the regulatory environment is expected to encourage broader adoption of digital assets by banks and other financial institutions. The U.S.’s approach to crypto is poised for a significant shift. The inauguration of President Trump signals a potential embrace of digital assets. Trump has vowed to be the first “crypto president.” His administration launched a crypto task force to develop a regulatory framework. The executive order on digital assets established a working group to recommend clearer policies.
Meanwhile, the European Union’s Markets in Crypto-Assets (MiCA) regulation has already set a precedent. It offers financial institutions clarity on the regulatory landscape for digital assets. This has already emboldened traditional players and should spur further activity. More clarity from lawmakers and regulators in 2025 will encourage blockchain experimentation and innovation.
3. Central Banks Shift Focus to Institutional Products
Central banks are adapting their strategies regarding digital currencies. While several years ago many were examining the feasibility of central bank digital currencies (CBDCs), more are now recognizing the private sector’s progress. Many have concluded that CBDCs for the general public are not a high priority. President Trump’s executive order on digital assets calls for banning the development and issuance of CBDCs, and in 2025, central banks might shift away from consumer-focused “retail” CBDCs. Instead, they will pursue digital assets aimed at the banking sector and other financial institutions, known as “wholesale” CBDCs. These wholesale CBDCs can improve institutional settlement capabilities and expedite the movement of capital.
4. Interoperability, Standards, and Trust: Paramount for the Future
The crypto industry is now built on a stronger foundation. The removal of bad actors, and easier access to digital assets, has attracted more investors. This, in turn, has caught the attention of traditionally risk-averse financial players. These changes reinforce the importance of trust, standards, and seamless connections within the larger financial system.
This is why there has been substantial momentum for Mastercard’s Multi-Token Network (MTN), which ensures more secure, scalable, and interoperable transactions using digital assets. Blockchain technology can also unleash innovation for both the crypto and traditional finance industries. In 2025, blockchain technology will likely embed itself even deeper into financial services, enabling faster transactions, greater transparency, newer innovative capabilities, and increased innovation overall.
