Mastercard has predicted that 2025 will be a turning point for cryptocurrency and the banking sector due to more defined rules and the increased adoption of blockchain technology.Â
This and other developments were highlighted in a recent blog post that Mastercard made available on its Newsroom site.
In the post, the financial giant said that with the growth of the cryptocurrency industry, products like the Bitcoin-backed Exchange Traded Funds are now taking root, thus implying acceptance by the mainstream.
Regulators and banks drive the adoption of tokenized deposits and stablecoins
One of the main trends in 2025 is tokenized deposits, which will exist alongside stablecoins. Banks are now issuing blockchain-based tokenized deposits to guarantee that they hold banking deposits and speed up the time for transferring transactions.
On the other hand, the adoption of stablecoins for business and remittances is increasing, and they are now worth about $200 billion. As the regulatory frameworks improve, tokenized deposits and stablecoins will become more stable and attractive to the market. Mastercard envisions a financial system in which these two innovations can help enhance the movement of funds.
The shift in the U.S. government’s stance under President Trump’s administration has led to the formation of a specific SEC crypto task force to define the regulatory framework for digital assets.
At the same time, the Markets in Crypto Assets (MiCA) regulation that the European Union introduced on Dec. 30, 2024, is giving banks and other financial firms direction on issuing stablecoins and other digital assets. This is because current regulations will likely make traditional financial firms more confident in dealing with digital assets, thus boosting institutional participation and development and preventing bad actors.
Central banks prioritize wholesale CBDCs to enhance settlement speed and cross-border transactions
Central banks of many countries are moving away from the development of CBDCs for the public. However, they are concentrating on the development of digital assets for financial institutions, referred to as wholesale CBDCs.
These institutional digital assets are designed to enhance the settlement and reduce the cost of cross-border transactions. The Trump administration has further strengthened this trend by prohibiting the development of retail CBDC in its policy.
Therefore, in 2025, central banks will probably continue to engage financial institutions to develop blockchain applications that enhance the movement of funds without necessarily displacing the private sector.
The integration of crypto with traditional finance has already progressed, and Bitcoin ETFs tied to the cryptocurrency started trading in 2024. This milestone and Bitcoin’s rising price of $100,000 show that digital assets are here to stay.
As fintech companies and financial institutions attempt to use the blockchain for improved efficiency, Mastercard stresses that security, trust, and ease of use are vital for mass adoption. The company believes that as these elements are enhanced, blockchain technologies can be scaled up to impact millions of people worldwide.
The ability to transfer funds between different blockchain networks will be very important in enabling financial transactions. Mastercard’s Multi-Token Network (MTN) is already solving this problem by providing secure and interoperable transaction facilities.
Teaming up with other big banks like Standard Chartered Bank and financial technology companies such as J.P. Morgan’s Kinex shows that the industry is now moving towards integrating blockchain technology into the banking system.
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