A transformative shift is underway, poised to redefine how global financial markets operate. As blockchain technology, digital assets, and cryptocurrencies gain mainstream traction, the velocity of money could accelerate dramatically.
Despite past industry controversies, the core concepts of crypto have captured significant attention. Major commercial entities across sectors and regions are actively planning, experimenting with, piloting, or adopting cryptocurrencies, stablecoins, and tokenized assets.
Programmable by nature, crypto assets have the potential to replace certain services currently offered by intermediaries like banks, stock exchanges, or brokers. Blockchain or distributed ledger technology enables the transparent creation, storage, and transfer of digital assets on a decentralized, peer-to-peer network with real-time, immutable transactions.
"The scale of current industry exploration suggests broader crypto adoption is coming, potentially upending existing economic frameworks," notes Lara Abrash, CEO of Deloitte US. "To move forward responsibly, we must carefully establish clear governance models to maintain transparency, fairness, and accountability."
Numerous countries are developing regulatory frameworks to permit the use of digital assets within their financial systems. This opens doors for financial institutions, businesses, nonprofits, governments, and consumers to streamline transactions—from跨国 bookkeeping and complex supply chains to payroll, benefits management, digital rights for intellectual property, taxes, and investment accounts.
Consumers already have the option to use stablecoins for various retail purchases without relying on traditional bank accounts, credit cards, or cash. However, these options can often be complex and costly. In countries where mobile phone ownership surpasses bank account penetration, a digital monetary system could offer fairer access as usability and cost-effectiveness improve.
Growing Brand Adoption and Institutional Interest
Tim Davis, Principal at Deloitte & Touche LLP and Global and US Blockchain and Digital Assets leader, observes that major platforms underpinning the modern global economy are beginning to recognize the potential impact and opportunities presented by crypto and digital assets.
"This includes mainstream banks and banking networks, credit card networks, and technology providers that are experimenting with or operating blockchain network nodes, or are developing plans to do so," he says.
Rob Massey, Partner at Deloitte Tax LLP and Global and US Tax Blockchain and Digital Assets leader, highlights PayPal’s integration of cryptocurrencies as a significant step toward transforming value exchange. Accessible to 428 million active accounts, including 35 million merchant accounts, PayPal allows users to buy, hold, and sell select cryptocurrencies. Account holders can also cash out to make purchases and transfer crypto between eligible PayPal, Venmo accounts, and other wallets and exchanges.
"PayPal’s adoption provides a crucial element for broader acceptance: access," Massey emphasizes.
JPMorgan offers another prominent example, having developed and deployed methods to represent traditional assets on a blockchain for frictionless settlement. Notable products include the JPM Coin System, a blockchain-based ledger and payment system, and Onyx Digital Assets, a multi-asset tokenization platform enabling financial institutions, asset managers, and fintech firms to record and represent financial assets as programmable tokens on a blockchain.
Recently, JPMorgan and Apollo Global Management outlined a vision for tokenized portfolio management—enabling large-scale personalized portfolios and streamlining order execution and settlement for both traditional and alternative investments. This system would be powered by blockchain, smart contracts, and asset tokenization.
Goldman Sachs has also entered the digital asset space, engaging in cryptocurrency trading and launching its own digital asset platform. Alongside companies like S&P Global, Moody’s, Broadridge, and Capgemini, Goldman has joined Canton—a privacy-enabled, open blockchain network using smart contract technology to connect entities. This permissioned blockchain aims to provide interoperability and control, supporting synchronized financial markets and enabling secure, controlled data and value exchange.
"The pace of blockchain evolution is rapid," states Wendy Henry, Global Blockchain and Digital Assets leader at Deloitte Consulting LLP. "The technical capacity to manage high volumes of global transactions with necessary transparency and privacy is becoming increasingly feasible. The ability for enterprises, especially financial institutions, to build applications and establish tokenized assets on public networks marks a significant advancement. Though not yet utilized at scale by financial institutions, this capability can enable expansion, driving wider adoption."
Furthermore, with the rapid advancement of generative AI, AI platforms could act as agents conducting financial transactions on behalf of humans.
"Digital assets are well-suited for AI platforms because funds can be directly transferred, controlled, and programmed," Davis explains. "The enhancement in how money is used introduces new risks and rewards, and AI’s rapid development could help accelerate digital asset adoption."
Platforms like Bitwave are emerging to bridge blockchain-based technologies with traditional finance. Bitwave is a digital asset ledger that integrates with common enterprise resource planning systems, enabling programmable money—including payments to suppliers, customers, and employees. The platform supports accounting, auditing, and reporting for data captured on distributed ledgers—functions critical for scaled adoption.
Another evolutionary step involves layering networks atop existing ones to aggregate transactions in ways that boost throughput and processing speed. Much like skyscrapers increase real estate capacity in dense areas, second-layer distributed ledgers can leverage the security of their underlying first-layer networks while significantly reducing transaction costs and increasing processing speed. For example, Optimism’s OP Mainnet is an open-source extension of Ethereum, designed to scale its ecosystem.
"As major platforms continue to roll out applications, consumer and business acceptance of crypto and digital assets is growing rapidly," says Davis. "These are important indicators that the global monetary and payment systems are on the verge of further disruption."
The Evolving Global Regulatory Landscape
Brian Hansen, Audit & Assurance Partner at Deloitte & Touche LLP and US Audit & Assurance Blockchain and Digital Assets leader, notes that regulatory frameworks for digital assets are taking shape in many jurisdictions worldwide.
The G20 Financial Stability Board and the International Monetary Fund have offered comprehensive guidance on how authorities might address macroeconomic and financial stability risks stemming from crypto asset activities and markets. The European Union’s Markets in Crypto-Assets Regulation (MiCA), passed in June 2023, provides rules for crypto assets not covered by existing financial services legislation. The Hong Kong Securities and Futures Commission has also released regulations covering tokenized assets, stablecoins, and crypto trading.
Approximately 130 jurisdictions are launching, piloting, developing, or researching central bank digital currencies (CBDCs), though US regulators remain in early stages of conceptualizing a digital dollar. California, meanwhile, has passed two bills to establish a virtual currency licensing regime and regulate digital financial asset activities.
At the US federal level, the regulatory tone is more varied. Crypto’s risks and volatility have prompted increased scrutiny across multiple fronts. The Financial Stability Oversight Council published a report identifying potential systemic financial risks stemming from connections between digital assets and traditional finance, urging federal agencies to continue enforcing existing rules and regulations.
The Securities and Exchange Commission (SEC) has approved several spot bitcoin ETFs for listing and trading—a significant development for US markets, paving the way for bitcoin investment within traditional brokerage accounts.
From a reporting standpoint, the Financial Accounting Standards Board has issued guidance on how companies should account for cryptocurrencies and other digital assets under GAAP. The Internal Revenue Service treats digital assets as property for federal tax purposes and has issued related guidance. Meanwhile, banking regulators are urging financial institutions to heighten their awareness of associated risks.
The Form and Function of Tokenization
As technological adoption and regulatory frameworks evolve, the global financial ecosystem is inching closer to a tokenized economy, where assets are represented digitally on a blockchain and value exchange is decentralized.
Non-fungible tokens (NFTs) have already garnered attention in specific areas like sports and art, but blockchain technology and the evolving regulatory environment can support the tokenization of a broader range of tangible and intangible assets—with proper risk awareness. These assets may include securities, loans, public and private funds, hedge funds and money markets, private equity, environmental credits, real estate, commodities, ownership rights, voting rights, and content licensing. Valuables can be transformed using encoded rulesets and proofs, then transacted via blockchain to significantly improve efficiency and transparency.
"Tokenization offers numerous potential benefits that are becoming increasingly compelling," Massey says. "Consider the typical costs and frictions associated with a transaction, like a commercial loan, and how tokenization and value management on a distributed ledger could improve the process." Using smart contracts and other automation tools, tokens can be encoded to execute, clear, and settle near-instantly. This process can be faster, cheaper, and offer 24/7 access with enhanced transparency.
Digital assets and tokenization can also help companies manage stranded cash on their balance sheets more effectively.
"It can enable them to explore new ways to facilitate cross-border payments, repatriate cash, and improve working capital management," Massey explains. "It could significantly enhance payroll processes, offering a method for continuous or frequent employee compensation—such as gig workers paid by task or by the day. Tokenization can streamline many traditional banking processes by reducing settlement times and costs."
Ultimately, tokenization may give rise to a system of programmable money where value is embedded within smart contracts alongside coded terms and conditions.
"Even without a third-party intermediary, companies could significantly improve cost, efficiency, and transparency," Henry says. "This could profoundly alter how they manage their accounting and finance functions."
Consider the friction commonly encountered in cross-border payments, which often involve multiple layers, regulatory scrutiny, and costs. With tokenization and programmable money, transactions can be executed immediately, anywhere, at any time. They can be automated based on certain trigger events, with built-in transparency and control. Rather than becoming entangled in payment channels, funds can be deployed according to working capital strategies and accessed when needed.
Taking Action in a Dynamic Landscape
"Despite regulatory uncertainty around how a decentralized financial system might evolve, many organizations see potential advantages, prompting a growing number to launch or consider their own digital asset strategies," Abrash notes. "Companies can consider several different pathways to plan and begin their digital asset journey."
Form a Cross-Functional Team. Assemble a team from across the enterprise—finance, treasury, accounting, technology, legal, risk, tax, compliance, operations, supply chain, HR, and marketing—to explore developments in the crypto and digital asset space and consider associated opportunities and risks.
Understand Blockchain and Web3. Learn how businesses can benefit from a transformed approach to data sharing and verification that offers a transparent, immutable record of transactions without intermediaries. Consider potential use cases where accountability and auditability matter, and where data needs to be open and transparent to multiple parties at arm’s length.
Evaluate Potential Uses for Cryptocurrency. Although the cryptocurrency market is volatile and has experienced significant failures, it is gradually maturing as familiarity increases and discipline and rigor improve. After substantial effort, analysis, planning, and execution around risks and opportunities, rules and regulations, and processes and controls, companies might consider opportunities to use cryptocurrency for investment, buying, selling, holding, and receiving or making payments.
"As the crypto and digital asset space evolves, barriers to entry and scaling are diminishing," Massey concludes. "The global economy is moving toward widespread adoption of these new business methods." When cryptocurrencies and digital assets become more accessible and easier to transact than fiat currencies and traditional processes, markets will likely see a wave of adoption that transforms how value is exchanged.
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Frequently Asked Questions
What is decentralized finance (DeFi)?
DeFi refers to a financial system built on blockchain technology that aims to recreate and improve traditional financial instruments—such as loans, exchanges, and insurance—in a decentralized manner, removing the need for intermediaries like banks.
How does tokenization work?
Tokenization converts rights to an asset into a digital token on a blockchain. These tokens can represent ownership or access rights and can be traded or transferred, often with increased efficiency, transparency, and liquidity compared to traditional systems.
Are cryptocurrencies legal?
The legality of cryptocurrencies varies by country. Many jurisdictions have established or are developing regulatory frameworks, while others have restrictions or bans in place. It's essential to understand the regulations in your specific location.
What are the benefits of programmable money?
Programmable money allows for automated execution of transactions based on predefined conditions, reducing the need for manual intervention. This can lower costs, increase speed, enhance transparency, and enable innovative financial products and services.
How can businesses start adopting digital assets?
Businesses can begin by educating key teams, assessing potential use cases, understanding regulatory requirements, and developing a clear strategy. Starting with pilot programs or partnerships can provide valuable experience before scaling up.
What risks are associated with DeFi?
Key risks include smart contract vulnerabilities, regulatory uncertainty, market volatility, and the potential for operational failures. Conducting thorough due diligence and implementing robust risk management practices is crucial for anyone participating in DeFi.