Digital finance is transitioning from speculative frontier to institution-ready infrastructure. Exchanges, asset managers and infrastructure providers are no longer operating in parallel but co-developing the next layer of financial plumbing — for instance, through Binance’s collaboration with Franklin Templeton and Circle’s partnerships with custodians such as BNY Mellon and BlackRock. At TOKEN2049 Singapore, this convergence was on full display. Executives from Binance, CME Group, Circle and more described how regulated products, stablecoins and tokenised assets are aligning with institutional mandates. Speaking on a panel, Binance’s chief executive officer, Richard Teng, observed that institutional participation has expanded rapidly, beginning with trading desks and now extending to corporates, family offices and even sovereign treasuries. Circle’s president and former CFTC chair Heath Tarbert added that legal clarity and programmable compliance are unlocking flows as banks begin building tokenised products on stablecoin rails. Across the industry, a clear convergence is emerging: products, regulation and infrastructure are advancing in tandem to form a hybrid financial architecture where compliance, transparency and interoperability anchor adoption. Stablecoins are being formalised under supervisory regimes; derivatives are embedding risk management; and custody providers are integrating tokenised assets into bank-grade systems. The institutionalisation of interoperable digital-asset markets is no longer a projection — it is underway. Stablecoins enter the regulatory mainstream Stablecoins are no longer the shadow currency of crypto trading; they have become the connective tissue linking digital networks with regulated finance. While their institutional adoption has accelerated, the total market capitalisation — around $300 billion as of September 2025, according to Morgan Stanley — still varies widely by region and use case, reflecting an ecosystem that is scaling but not yet saturated. At TOKEN2049, two complementary models — Circle’s regulation-first USDC and Tether’s adoption-first USDT — showed how transparency and oversight are aligning stablecoins with mainstream liquidity systems. Tether, now the issuer of the world’s largest stablecoin with more than $170 billion in assets and $127 billion in US Treasuries, has assumed a systemic role by sheer size and usage. Its reported ability to redeem $7 billion in 48 hours during a period of market stress, alongside annual profits exceeding $13 billion, underscores how far stablecoins have moved into the institutional arena. David Katz, Circle’s vice president of strategy and policy for Asia Pacific, said regulatory clarity is accelerating stablecoin integration into financial infrastructure. USDC’s reserves are primarily managed through short-term US Treasury instruments, with asset management by BlackRock and custodial partnerships including BNY Mellon — part of Circle’s effort to align its transparency standards with the EU’s Markets in Crypto-Assets Regulation (MiCA) and the US Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. Circle executives Katz and Tarbert both underscored that stablecoins integrate compliance and programmability, enabling banks and asset managers to participate securely. However, Katz warned that regulatory clarity must now be matched by technical interoperability — the ability for stablecoins, tokenised deposits and other digital money types to interact safely across systems. Without this, he said, liquidity will remain trapped in silos, limiting the efficiency gains that tokenisation promises. Paolo Ardoino, CEO of Tether, said that 50–60% of USDT transactions now come from trade, remittances and business payments rather than speculation. “We built a user base first; now the banks are integrating with us,” he said. From Nigeria to Turkey, SMEs and households use USDT as a stable unit of exchange amid inflation and capital controls. Tether’s 2024 restructuring into four divisions — Data, Finance, Power and Education — marks its evolution beyond issuance. Its Finance division’s Hadron platform supports institutional tokenisation, while the group plans to launch USAT, a US-regulated stablecoin, by December 2025 through its partnership with Rumble, aimed at expanding digital-dollar access across consumer and institutional markets. Together, Circle and Tether trace the same trajectory: stablecoins evolving from speculative instruments to regulated infrastructure underpinning institutional liquidity. David Katz, Vice President of Strategy and Policy, Asia Pacific Paolo Ardoino, Chief Executive Officer, Tether Institutions design market infrastructure for digital assets As stablecoins establish the monetary layer of tokenisation, institutions are building the market infrastructure that surrounds it — through derivatives, custody, and collateral systems engineered for transparency, capital efficiency, and operational resilience. Tim McCourt, head of digital assets at CME Group, said during a panel discussion, “If we look at open interest as a proxy for institutional adoption, we’ve seen continued acceleration.” Open interest in digital-asset derivatives reached nearly $40 billion in September 2025 — more than double the year before — evidence that regulated products now anchor risk transfer and liquidity across digital and traditional markets. McCourt noted that interoperability between public blockchains, permissioned networks and traditional rails is becoming essential for scale. Derivatives and stablecoins, he added, are increasingly being used not only for hedging but to unlock capital efficiency as institutions manage digital-asset exposures. Usman Naeem, Coinbase’s global head of derivatives sales and agency trading, said that “for every dollar of spot, eight to ten dollars of derivatives are traded.” Following its $2.9 billion Deribit acquisition, Coinbase is integrating trading, margin and clearing into a unified system — mirroring clearing-house design principles that strengthen collateral transparency. In custody, Zodia Custody — backed by Standard Chartered, Northern Trust, SBI Holdings and more — is building a cross-jurisdictional custody framework: a bank-grade infrastructure that enables institutional clients to consolidate global digital-asset operations on a unified platform, configurable for UK, EU and other local standards across Asia Pacific. Similarly, AMINA Bank’s upcoming Hong Kong hub will offer custody, trading and tokenisation under FINMA-grade controls, showing how institutional governance standards are migrating to digital assets. Meanwhile, risk-technology firms such as Sumsub are extending that discipline to identity verification. Chief growth officer Ilya Brovin described continuous, AI-driven verification as a form of “always-on” assurance — a safeguard against deepfakes and synthetic identities. For institutions, this continuous oversight parallels real-time settlement as a mechanism for maintaining trust across programmable networks. Usman Naeem, Global Head of Derivatives Sales and Agency Trading, Coinbase Michael Benz, Head of Asia Pacific, AMINA Bank Regulatory clarity unlocks global adoption Clearer rules are bridging innovation and integration. Richard Teng of Binance said institutional adoption first gathered pace in the US, where frameworks for ETFs and stablecoins created the blueprint for mainstream participation, driving momentum worldwide. At the same time, Asia has moved quickly to translate policy into practice, according to Michael Benz, head of Asia Pacific at AMINA Bank. He pointed to Hong Kong’s Virtual Asset Trading Platform (VATP) regime — which took effect in June 2023 with full licensing enforcement beginning in mid-2024 — and Singapore’s evolving Payment Services Act, under which MAS finalised a dedicated stablecoin framework in August 2023, as key regulatory enablers. AMINA’s upcoming Hong Kong hub, expected to be fully operational by year-end, underscores how regulatory clarity is driving institutional traction across the region. Both Circle and Tether are expanding across Asia Pacific — Circle through regulated cross-settlement corridors and Tether through adoption in emerging markets — highlighting the region’s growing share of global stablecoin activity and its rising influence on regulatory standard. Zodia Custody’s managing director for Singapore and Hong Kong, Deborah Algeo, likewise identified Asia as a growth engine, noting that banks in the region are increasingly asking not if they should engage with digital assets, but how to do so safely under supervision. Meanwhile, Sumsub’s Ilya Brovin highlighted that Asia Pacific has become the fastest-growing region for compliance and digital-identity innovation, fuelled by regulation, digitalisation and a tech-literate population. Regulators in Singapore and Hong Kong were among the first to implement comprehensive digital-asset frameworks — covering licensing, AML and capital requirements — helping the region move swiftly from regulatory design to adoption. Brovin lauded regulators — such as the Hong Kong Monetary Authority (HKMA) and Monetary Authority of Singapore (MAS) — for co-developing rules through sandboxes and open consultation, where engineers, compliance teams and policymakers test safeguards together. This collaboration, he noted, is shortening time-to-market for compliant digital-asset services and embedding alignment from the design stage. Beyond Asia, regulators like the UAE’s central bank under its new Payment Token Services Regulation and Saudi Arabia’s Vision 2030 tokenisation pilots are formalising stablecoin and asset-token frameworks with global institutions — cementing this as a truly global convergence. Deborah Algeo, Managing Director for Singapore and Hong Kong, Zodia Custody Ilya Brovin, Chief Growth Officer, Sumsub From infrastructure to integration The digital-asset market is no longer building in parallel to traditional finance — it is building into it. As Zodia’s Deborah Algeo noted, “The institutions we already trust are the ones adopting digital assets.” The broader takeaway is that finance is no longer defined by a divide between centralised and decentralised models, but by how effectively both can innterlinnk under verifiable trust — where compliance, programmability and governance coexist within the same digital framework. As Circle’s David Katz emphasised, the challenge ahead is no longer compliance, but connectivity: how seamlessly digital assets such as stablecoins and tokenised deposits can interoperate on-chain and across traditional financial systems under shared standards of trust. Ultimately, the story unfolding is not about disruption but integration — where the transparency and programmability of digital networks meet the scale and credibility of established institutions.
