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This blog post forms part of our 2025 Regulatory odds Series. Over the next few weeks, we will exude the key regulatory and political trends we expect to see over the next year.
We recently described how changes in the American reducing and political landscape during 2025. years would enable US banks to deal with cryptoasso like never before. Looking outside the US, we expect 2025 to see the main digital movements related to the property involving financial institutions around the world. Specifically, we believe that there will be significant progress on a global level among financial institutions in the realms of property.
Property tokenization – which includes blockchain to recording ownership of digital assets, other financial assets, real world – is innovation in blockage and cryptor that has received significant interest in financial institutions around the world. The growth of the number of banks launches projects and pilots to identify ways to improve efficiency in processing and delivery services.
For example, banks investigate cases of use related to the tokenization of deposits, bonds and securities, And for the creation of efficiency to internal processes, such as treasury management. If successfully performed, the tokenization of financial instruments can lead to a more efficient settlement and reduced costs of financial institutions and their clients. The transparency of blockchain can also be valuable to reduce risk frauds regarding tokenized assets, and can enable efficient audit of records associated with tokenized products and services.
Only in the past year, numerous main financial institutions announced the production lines enabled by tokenization. HSBC has launched a platform known as Orion In which the Bank develops an offer for clients to access the analyzed deposits and tokenized gold. Other large financial institutions are implementing similar development development. UBS started the service line known as UBS tokeneize, that describes as “As an offer of full service for digital assets “that” supports the possibilities throughout the continuation, distribution and detention, initially focus on the tokenization of bonds, funds and structured products. “
As financial institutions came to see the potential of tokenization, another important set of stakeholders take into account the interest in this technological innovation: banking regulations and supervisors in many world financial centers. Indeed, an increasing number of regulators begins to see the potential benefits of the tokenization – and nowhere in the Asian-Pacific (Apac), where regulators take steps to encourage the financial institutions in the effort to have innovation and competitiveness in their financial sectors.
In August 2024. year, Monetary power of Hong Kong (HKMA) launched The SANDBox regulatory initiative known as the project ensemble, which is designed to enable institutions to experiment with the tokenization of the property in the real world. According to the HKMA, the sand box includes Testing “Interbank settlement using experimental tokenized money, focusing on transactions involving ikenissed property.” Sand participants include HSBC and Hashey, the greatest digital assets of Hong Kong.
In November 2024. The Singapore Monetary Administration (MAS) issued a statement in which she indicated his intention to support commercialization tokenization assets. From 2022, MAS cooperated with other participants in the public and private sector known as the project guard, which wants to improve liquidity and efficiency in financial markets through the tokenization of financial markets. Since then, Mas helped facilitate more than 15 trials tokenize projects using different financial products in six currencies. Pilot projects are viewed on the use of cases such as asset and wealth management, treasury leadership and tokenize links.
We think 2025 will see the spread in the number of regulatory boxes and other similar initiatives designed to support the responsible for the use of the use of financial institutions, and that countries in the Apac region will continue to lead the road. But we will probably see regulators in other parts of the world, such as UAE, EU, UK, start taking significant steps to adapt to the expansion of the tokenization projects among financial institutions.
Already, regulators and policy makers outside the Apac region begin arriving to the merit of tokenization. For example, in November 2024. year, the Higher Government Officer of Great Britain discussed the event on tokenization in London and noted about his potential for the “revolution of traditional markets” and spoke about the UK “Ambitions for consists of Great Britain Global Center for Tokenization of Securities, Through Initiatives such as researching debt issuance in the UK. . . and downloading forwarding from the sand of the financial market infrastructure. “
Last summer, the European Commission held a workshop about the European policy makers to better understand the implications – the European Union to place the European Union on innovative potential potential and regulatory implications, and regulators. Moreover, European Banking (EBA) has indicated This understanding of the benefits and challenges of tokenized deposits will remain one of its priorities this year.
Global bodies for setting up financial standards will also probably use 2025 to explore the effects of tokenization and setting standards for industry. In October 2024. year, Financial Stability Committee (FSB) Published Report on the implications of tokenization – including opportunities and risks – for the financial sector, and we can expect FSB and other similar guards dive deeper into this topic during the year in front. Included in this Standard setting, there is no doubt that the expectations of financial institutions will be engaged in tokenization will adhere to robust standards for adjusting the controller.
Sloven all these activities are that financial institutions Around the world will feel more confident – and they will even encourage them in policies – to be deeper in researching the potential tokenize and rolling projects and services involving involved projects and services involving tokenized assets. These financial institutions that have not already had meaningful tokenization will feel increasing pressure to do this for fear of being able to see, and become more likely to see tokenization as a key initiator of innovation and competitiveness.
When everything is said and do, we expect that the observers of the digital space for the property will look after 2025. as a landmark year for financial institutions and their efforts to innovate through the aquet.
Regulatory tokenization
