2025: TradFi strikes back

The ideas embedded in stablecoins are now gospel, but business models are still up for grabs.

It would be too easy to declare that 2025 was the year of the stablecoin. Rather, the core ideas beneath these cryptographic pegs to another asset – usually fiat currency, particularly the US dollar – have been embraced by leading financial institutions.

Digitally native, programmable, 24/7 settlement assets are now clearly part of the new, emerging generation of financial infrastructure. These ideas of have been manifest most plainly in stablecoins. Regulation has been important: the US legislated rules to recognize and license non-yield-bearing stablecoins, as have Hong Kong and the UAE. This has given banks and other players enough clarity and confidence to embrace these tools, but they had already been experimenting.

To what end? Although figures such as BlackRock’s Larry Fink proclaim “everything will be tokenized”, for the foreseeable future, this remains unsatisfying. Unlocking secondary liquidity in illiquid assets is useful only to a point. Some things deserve to remain illiquid; friction has its utility, too, particularly when it comes to protecting retail investors.

Meanwhile the real volumes in tokenized assets, including stablecoins, is overwhelmingly to be found in the crypto world. In 2025, TradFi players were able to finally embraced many aspects of digital assets. Most intriguing are experiments in touching public blockchains, as institutions attempt to creep beyond the safety of their walls. But the crypto world is still there, still separate, still very different.

Four TradFi experiments

If we look at TradFi developments over the past year, agreement is found in a general acceptance that tokenized assets, always-on markets, and software agents will need programmable cash that moves globally, atomically, and around the clock. Institutions are eager to escape the limitations of batch processes, business hours, and human-driven workflows that characterize legacy money rails.

The Depository Trust and Clearing Corporation (and its subsidiary, custodian Depository Trust Company), has spent years on blockchain-based experiments to address post-trade handling of the $4 quadrillion of securities that pass through its systems every day. This year, these various projects cohered into the integration of tokenized cash (both institutional stablecoins and tokenized deposits) to finance intraday settlement and repo deals involving US Treasuries. In this context, stablecoins are not a new retail money, but are used as a liquidity tool to make collateral more mobile and settlement less risky – under the purview of DTCC’s centralized governance.

Although this is a far cry from decentralized finance, it is closer in spirit to the original use cases for stablecoins, which were invented as capital-market tools to enable efficiency in crypto markets.

SWIFT, the great bugbear of crypto enthusiasts, has also maneuvered to serve as the connective tissue among multiple forms of digital money. SWIFT is a messaging service that powers correspondent banking. Instead of fading away as stablecoins or fintech wallets supposedly enable cheap and instant peer-to-peer transfers, SWIFT has introduced its own blockchain-based ledger. It is working with Consensys, an Ethereum-focused blockchain developer, to build it.

SWIFT is also working on how to rout CBDCs, tokenized deposits, and stablecoins across different networks using a blockchain-based orchestration layer. This is on top of SWIFT’s traditional messaging, not a replacement. If these tests move into production, it would allow banks to treat regulated stablecoins as just another currency, reachable via familiar interfaces, and subject to the same compliance controls.

In parallel, Canton Network, operated by Digital Asset Holdings, involves a consortium of global banks to deal in stablecoins, tokenized deposits, and tokenized securities with one another. Like SWIFT, it is an interoperability service. Like DTCC, it has also also started with trials involving repo trades (both of them work with Chainlink to address these challenges), in which on-chain US Treasuries were financed with multiple stablecoins in real time and over weekends. Whereas SWIFT remains a key player in cross-border payments, Canton is a broader network that aims to synchronize assets, data, and cash across various apps, and its focus on cryptographic privacy makes it a crypto-native play. But its members are primarily global banks.

Finally, JP Morgan’s digital-asset unit, Kinexys, is now experimenting with putting a deposit token, JPMD, on Base, a layer-two blockchain that settles on Ethereum. Although this is not ready to deploy, it shows the bank acknowledges the need for a bank-issued analog to crypto stablecoins for institutional clients. Those clients don’t care about stablecoin-this or -that, but they do want the benefits of on-chain settlement without having to leave the regulated world of deposits.

These tests represent an evolution from Kinexys’ antecedent as a permissioned blockchain for internal institutional payments, ferrying JPM Coin among client accounts to settle inter-company flows within the bank’s own ecosystem. It shows that global banks cannot serve corporate clients well if they enclose the ideas of programmable settlement assets within their four walls.

Infra v money

These players – and other banks, fintechs, and crypto businesses – are jostling for competitive infrastructure, but also to define what counts as money on these ledgers, and who gets to issue it. Digitally native, programmable settlement assets come with one other feature: composability. They are meant to be standardized, modular blocks that can combine with other protocols, smart contracts, and DeFi applications. If we compare finance to a factory’s assembly line, composability is the introduction of interchangeable parts.

To that end, JP Morgan’s experiments with Ethereum layer-2s or with other banks such as DBS can reshape how it serves corporate treasurers, for example. Designing the new infrastructure can give enterprises a head start on designing new financial products and services.

Stablecoins are just another tool, but in 2025 they became the vehicle through which these ambitions were channeled. They represent a permissioned token backed by bank deposits, running on blockchain rails, to be used for collateral, margin, and payments. Banks need to add KYC gates and balance sheet to stablecoins; a public stablecoin like Tether does not.

Similarly, stablecoins have become the primary means for DTCC and SWIFT to leverage their own roles in this emerging world of on-chain finance. Whereas JP Morgan sees the need to connect its own tokenized money to public blockchains, these players are enabling others to use their tokens (including stablecoins) across their own networks.

Proving stablecoins

What 2025 proved was that the largest, most systemically important anchors in finance see the ideas behind stablecoins as part of the future stack of payments and securities. Emphasis on ‘the future’. This was also a year that saw bitcoin surge and then tumble, and while such gyrations mean little in the grand scheme of things, bitcoin remains the bellwether for unregulated crypto. And crypto markets still dominate stablecoins and other tokenizations of real-world assets. Meanwhile, traditional bank, payment, and fintech rails continue to move mainstream consumer, corporate, and SME payments.

Indeed, TradFi spearheads into stablecoins are concentrated on specific uses, such as intraday repo, internal (but global) corporate treasury flows, and niche examples of cross-border FX. These are areas with provable benefits and relatively easy governance.

2025 was probably the year when TradFi took on the crypto world’s notions of open, permissionless rails, separate from the banking system. The benefits of digitally native, programmable, composable settlement assets, it turns out, can be incorporated into traditional finance. Stablecoins can be a boon to TradFi.

Questions for 2026

But are stablecoins the future, or a transition to something else? In crypto, they are meant to be neutral, global, and beyond the control of any one bank. Interoperable networks like Canton should enable lots of banks to trade. But the very biggest banks would be happy to see this narrow to an oligarchy. Users in an Argentina or a Nigeria might prefer Tether, but the overwhelming weight of on-chain US dollars could end up issued and monitored by JP Morgan and a handful of other banks.

Then there is the question of central bank supervision, issuance, and macro-prudential surveillance. The current US administration is eager for stablecoins to buy lots of US debt. But are these issuers merely benign investors? What if there’s a Silicon Valley Bank-style run on one of them and they have to dump their Treasuries? Are they going to become transmission channels of monetary policy, as commercial banks are today? Are they going to remain ‘narrow’ banks that don’t lend, or do they become shadow banks? All tough questions that suggest the idea of the stablecoin could well change.

This new year of 2026 will test all of these pilot programs. Do they remain within their scripted, tightly scoped parameters, or do they move toward real deployment? Do various concepts for interoperability succeed, or do banks and others retreat to simpler, siloed solutions? Most of all, will clients want to use these things? It’s one thing to work with some venturesome, trusted partners, and another to attract the broad universe of customers.

The unregulated crypto world is not going to impinge on corporate finance and transaction banking, but it could pose its own risks: the more crypto and TradFi intertwine with only loose regulatory oversight, the higher the possibility that the routine chaos of crypto markets goes mainstream. Meanwhile crypto solutions will continue to make headway in places where traditional financial services are expensive, lousy, or hard to access. What is interoperability when your potential customers want to exchange USDT?

Within regulation, one of the most interesting questions concerns privacy versus compliance. Zero-knowledge proofs are one technique that suggest this doesn’t have to be a binary question. These stablecoin experiments will reveal regulatory acceptance and appetite for such solutions.

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The JDB Report wishes our readers a healthy and prosperous 2026!