2026 marks the shift from experimentation to mainstream digital asset use, with regulation, interoperability, and tokenisation shaping how DLT embeds into finance.
2025
Ready for adoption; time to act
Seventeen years after the pseudonymous Satoshi Nakamoto wrote Bitcoin’s founding paper, 2025 has put beyond doubt that digital assets have exceeded critical mass, are an essential and accepted part of the global financial system, and are here to stay.
In the markets, use cases for distributed ledger technology (DLT) moved from experimentation to implementation. By any statistical measure, it was an extraordinary year. The Global Financial Trade Associations’ DLT Report’s subtitle, “Ready for Adoption, Time to Act,” succinctly encapsulated the year’s zeitgeist. Word-first launches and groundbreaking announcements were almost daily events, and the distinction between financial services firms and technology providers further blurred.
It was also a seminal year for legislation and regulation. 2025 included the USA’s catalytic Presidential Working Group’s Report and GENIUS Act; the UK regulators’ DLT acceleration (see e.g. here and here) and the Property (Digital Assets etc) Act 2025; the EU’s Projects Pontes and Appia, and the Market Integration Package; the UAE’s Digital Dirham; Hong Kong’s Stablecoins Ordinance; Singapore’s Global-Asia Digital Bond Grant Scheme; Australia’s INFO 225; and Basel’s cryptoasset standard review.
2025’s progress firmly sets the scene and the starting cadence for 2026.
If you need to get up to speed, see Ashurst’s Digital Assets 101. For a deeper dive into Ashurst’s 2025 insights, visit www.ashurst.com/digitalassets.
Legislation and regulation
The biggest blocker to wider adoption
Legal and regulatory constraints and uncertainty are widely seen as blockers to broader DLT adoption. For example, ValueExchange found that it is holding back more than 50% of firms from collateral tokenisation. Deutsche Bank posits that regulatory uncertainty is the main barrier to asset tokenisation. Broadridge found that regulation was the top tokenisation concern for 73% of its survey respondents.
Updated regulation, with appropriate guardrails, can remove outright prohibitions or limits on digital asset activities. It can also provide legal clarity; for example, to define DLT settlement finality and to specify what happens upon insolvency events.
Regulation is crucial to unlocking the sector’s development. A point of view increasingly shared by traditional finance (TradFi) (for example, HSBC) and digital natives (for example, Circle). Regulation enables TradFi to adopt DLT and to collaborate with digital natives. It also accelerates the integration of digital natives into mainstream finance.
New technology and use cases can pose novel, and sometimes systemic, risks. Governments, legislatures and regulators have a fine line to tread, and may not always be pulling in exactly the same direction. Over-regulation can stifle innovation and economic growth, and may drive activity to unregulated offshore destinations. Under-regulation exposes end-users to potentially macroeconomic systemic effects.
There were many 2025 regulatory milestones, but 2026’s to-do list is already extremely full, with many challenges and much to implement.
Whilst authorities now seem universally to accept that regulation must be technology-neutral (e.g. Basel), in 2026, we expect other regulators to follow the UK Financial Conduct Authority’s (FCA) lead, promoting technology-positive regulation.
Digital natives can “move fast, break boundaries, and challenge the assumptions of last century’s financial systems“. Regulation must keep pace. To pick just three jurisdictions, we expect a further uptick in the UK’s pace in 2026, with October 2027 now pencilled in as its cryptoasset regulation go-live date. Following the publication of the Market Integration Package, amongst many other initiatives (see above), 2026 will be a packed EU year. Despite much fanfare for the USA’s 2025 GENIUS Act, it only relates to stablecoins. In 2026, the more broadly based CLARITY Act will continue its (harder) regulatory journey. Meanwhile, the SEC, CFTC, and other US federal regulators will continue with their mandate under the Presidential Working Group’s Report to take immediate action and use their existing powers to enable the trading of digital assets.
Whilst central bankers will rightly continue to highlight DLT systemic risks, we anticipate (and hope) that 2026 will see more regulatory voices also proffering possible solutions (for example, as the ECB and European Commission did in 2025).
Digital plumbing
Drive for interoperability and common standards
Digital assets transacted on DLT are a once-in-a-generation change to financial market infrastructure and tech stacks (‘digital plumbing’). Traditional finance runs largely on existing interoperable rails, whereas the digital plumbing for DLT-linked financial services is still being designed and built. This seismic shift will entail a number of ensuant and overlapping challenges in 2026.
As with other DLT themes, regulation will strongly pervade here. Early TradFi adopters have tended to use private blockchains, in contrast to public blockchains for digital natives. Whilst regulators are not in the business of choosing or backing particular technological solutions, regulatory policy makers are seeking to ensure a level playing field through common standards and interoperability. See for example the comprehensive proposals in the EU’s MIP, including the requirement for technical standards that support interoperability and the Central Securities Depositaries (CSD) hub and spoke model.
History is replete with examples of competing technologies. Some have adapted to facilitate fairly seamless interaction (e.g. iOS and Android), others not at all (e.g. VHS and Betamax). 2025 saw regulators conceptually accept that public blockchains with appropriate (increasingly developed) guardrails are a key part of the ecosystem. A key practical challenge for 2026 continues to be that the digital infrastructure being designed and build is not fragmented or incomplete (for example with so-called ‘walled gardens’). Fragmentation and lack of interoperability could slow and hinder mass-market adoption. That said, some market participants may see a lack of interoperability as a competitive advantage.
A related challenge to watch in 2026 and beyond is the interface of TradFi rails with digital plumbing. For example, one factor driving the rise of stablecoins has been the need for fiat money digital on- and off-ramps. Another is as a tool for cross-border settlement of USD-denominated payments. Traditional infrastructure will continue to exist for many years yet, and will run in parallel with the new digital rails. It is important that the intersection is as seamless as possible.
Notwithstanding much progress in 2025, and this work’s importance being recognised by regulators (e.g. here and here), the compliant development and agreement of digital asset common standards remains crucial in 2026. As they did in 2025, trade associations (such as ICMA and AFME) will continue to drive and accelerate this work.
Digital securities
Cash leg remains a key challenge
DLT has many potential use cases in financial services. Digital securities, money & payments and tokenisation are where we expect to see the biggest 2026 developments.
In addition to the pervasive themes of regulation and interoperability, a key 2026 challenge for digital securities remains the cash leg. That is, the transformation of fiat money to digital value for the payment leg of on-chain transactions.
2026 will see the continued development of the multi-moneyverse (i.e., co-existing forms of digital money that aim to be freely exchangeable). Whilst 2025 saw the rise (and rise) of stablecoins as the putative digital value, we expect challenges to this hegemony in 2026.
Although there will not be a US central bank digital currency (CBDC) in the near future, developments in other jurisdictions (if not yet full adoption) will follow the UAE’s CBDC. For example, the EU will be particularly active in this space (in particular regarding the dominance of USD-denominated stablecoins and multi-jurisdictional stablecoins) (see also above). Whilst work continues on a UK CBDC, and 2025 saw a thawing Bank of England approach to systemic UK stablecoins, there will be a stronger Bank of England digital ground-swell through RT2 (the UK’s recently renewed real-time gross settlement (RTGS) service).
Tokenised deposits are another key pillar in the multi-moneyverse. As for the other forms of digital value, they have their advantages (and disadvantages), and their key supporters. Their main advantage is their equivalence with a bank deposit, with a commercial bank balance sheet backing. 2026 could see proposed solutions to their key limiting factor; that they are a bilateral-only claim.
We also expect to see further ground-breaking digital security issuances in 2026. For example, the UK Government’s highly anticipated fully on-chain sovereign debt pilot (known as DIGIT).
Digital money & payments
The multi-moneyverse
Whilst 2025 saw much technical debate about the different types of digital ‘money’, including the fairly esoteric central bank topics of the singleness of money and fractionalised reserve banking, the practical application of digital money and payments was particularly active.
The payments sector is already highly competitive and technologically vibrant; DLT has further catalysed this. 2025 saw significant market developments and innovation from established actors across the sector (e.g., Visa and Mastercard), challengers (e.g., Revolut), and digital natives (e.g., Kraken). Stablecoin-as-a-service (SCaaS) is now available (e.g., Coinbase), and non-financial sector entities are exploring their own stablecoins (e.g., Sony reportedly in relation to its gaming ecosystem’s media content). As other forms of digital money and payment methods (see above) become increasingly available in 2026, they will also feed into payment systems, adding further momentum. As we have already seen with payments generally, interoperability between payment systems, infrastructure and instruments (e.g. digital wallets) will also be a key theme in 2026. It will be a question of ‘horses for courses’, as end-users vote with their feet in deciding which part(s) of, and which interfaces with, the multi-moneyverse suit them best for each respective use case.
As with the other use cases, regulation will continue to pervade. For example, the EU‘s Payment Services Regulation and Third Payment Services Directive are intended to dovetail with the Markets in Crypto-assets Regulation (MiCA) to support TradFi /digital convergence. This should give cryptoasset service providers (CASPs) a streamlined application process in relation to certain payment services.
Tokenisation
The lowest hanging fruit
Tokenisation is a key component of future financial services, offering many use-case benefits. BNY CEO Robin Vince has described tokenisation as a megatrend. As with other parts of the DLT ecosystem, and despite the many advances in 2025, these are still early days. BlackRock’s Larry Fink and Rob Goldstein, writing in The Economist, opine that “If history is any guide, tokenisation today is roughly where the internet was in 1996”.
Broadridge’s findings show that collateral tokenisation (along with transaction lifecycle automation) is seeing the widest adoption in capital markets. Citi finds that, along with stablecoins, collateral and funds account for the vast majority of current tokenisation use cases. Citi’s respondents predict fixed income tokenisation (largely in the form of collateral) will have the fastest growth by 2030, with tokenised funds in second place.
There are many benefits that, as with other DLT use cases, will manifest in different ways and to varying degrees. Cost savings are a common theme. Tokenisation is estimated to generate aggregate savings of USD135 billion across the UK, EU and US funds industry. Collateral tokenisation is expected to deliver immediate annual savings of USD346 million per Tier 1 firm (by increasing the mobilisation of overnight collateral: The ValueExchange). Collateral tokenisation will improve collateral delivery and reduce complexity. Funds tokenisation is seen as one of the simplest DLT use cases to scale, increasing the accessibility of certain assets to a broader range of investors, with potentially lower management fees (see, for example, the UK Investment Association’s Fund Tokenisation Blueprint, and more recently the FCA’s CP25/28).
With the RWA tokenisation market conservatively estimated to reach USD1.5-2 trillion by 2030 and USD3-4 trillion by 2035 (excluding stablecoins) (Deutsche Bank Research), and with tokenisation’s potential use cases, the 2026 and longer-term trajectories are clear.
Collaborations and M&A
A question of ‘how’ and ‘when’, not ‘if’
As the huge potential of DLT for the financial services sector is now widely recognised, so is the value that digital natives bring to TradFi, and vice versa. The value-adds manifest in many different ways. Each collaboration will have its own ambitions and targets, and will need to be structured accordingly.
So far, material M&A activity has largely been confined to digital natives with digital natives. TradFi and digital-native partnerships have tended to take either a more prudent services-provision approach or the outsourcing route. For example, Ripple, leveraging its on-chain technology, infrastructure and know-how, is providing digital asset custody to support BBVA’s cryptoasset services. In turn, TradFi institutions are providing support services to digital natives. For example, to mitigate perceived digital-native counterparty risk, BBVA reportedly provides custodial services for clients’ US Treasuries, which Binance accepts as margin for trading.
As happened back in the day between internet service providers (ISPs) and traditional media, with some digital natives’ market capitalisations now rivalling or exceeding those of large financial institutions, and with further use-case rollouts, DLT collaboration will encompass material TradFi/DeFi M&A activity in the short- to medium-term. We will continue to see increased scale and manifestations of TradFi/DeFi integration as the functions of each continue to cross-pollinate. Some collaborations will be evolutionary dead ends; others will adapt, diversify and thrive.
AI
To infinity and beyond?
It was the year of AI (President Xi Jinping), the Architects of AI were Time Magazine’s 2025 ‘Person [sic] of the Year’, and vibe coding was Collins Dictionary’s Word of the Year. However, at the same time, AI slop was Merriam-Webster’s and Macquarie Dictionary’s 2025 Word of the Year, and we had a possible AI bubble. And that is before we get to ESG, AI regulation and ethics.
Bubble/crash or not, and notwithstanding the other challenges, the AI technology genie cannot be put back into the bottle, and it is here to stay. (The early internet is, of course, now a classic example of a technology that had growing pains.)
DLT and AI can enhance each other’s technological strengths. They also have the potential for unique collaborative use cases.
In 2026, we expect financial services firms to lean heavily into the power of AI agents. For example, the further roll-out of AI-powered payment agents (see Ashurst’s deeper dive here).
We also expect to see AI usage move much more firmly from piloting phases to workflow scaling. The most innovative firms will integrate combined AI and DLT into their new systems. For example, fraud prevention, AML, KYC, and CTF are all areas ripe for AI and DLT use cases.
2026 will also see further developments in the (currently fragmented and differing) international approaches to AI law and regulation. The big question is whether the rough edges of divergence start to smooth out into more harmonised international frameworks and practices.
Data privacy/protection
Square peg, round hole?
Decentralisation and immutability are key features of DLT (particularly public and permissionless blockchains). However, these attributes can inherently conflict with data protection laws. For example, it can be difficult to identify the specific DLT actors’ data protection roles (e.g., controller or processor) and thus their responsibilities. The immutable nature of blockchain makes it difficult to apply several fundamental data protection concepts. For example, data minimisation, the right to be forgotten, the right to rectification, international transfers, automated decision making and purpose limitation can all be challenging to implement on DLT.
This year finally saw data protection regulators issue their guidance on DLT. For example, the European Data Protection Board (EDPB) published its Guidelines in 2025, and the public comment period has now closed. The UK Information Commissioner’s Office (ICO) also published DLT Guidance, and its consultation on that guidance closed in November 2025.
A fundamental premise of EU and UK data protection laws is that systems must be compliant with privacy “by design and by default”. Both regulators have sought to provide practical steps as to how privacy and DLT can be reconciled in practice but neither shy away from addressing the hard fact that putting personal data on DLT has significant challenges from a privacy compliance perspective and, in common with financial sector regulators (see above), are finding it difficult to square DLT’s unique attributes with existing legal frameworks.
The ICO guidance is, to some extent, more practical than the EDPB guidelines, as it considers how controllers could use differential privacy techniques involving the addition of random noise to data to effectively anonymise it in the hands of others. The output of such differential privacy techniques may not constitute personal information in the hands of other participants.
In 2026, we expect further developments in DLT data protection compliance as both regulators finalise their guidance. We hope that regulators can bring fresh thinking to address DLT’s novel challenges.
2026
The year of mainstream DLT use cases
In 2025, digital assets moved from experimentation to adoption. We saw exponential market growth as DLT moved beyond its niche and became an accepted and valued part of the financial services ecosystem.
2026, in one sentence, will be the year of mainstream DLT use cases. Of course, that is not to downplay the many challenges that digital assets will present in 2026, too.
Distributed ledger technology and digital assets are no longer theoretical, experimental or niche. Financial services firms which have not analysed DLT’s competitive opportunities (and challenges) in their market would be well-placed to make this a Q1 2026 priority.
For Ashurst’s 2026 articles, podcasts, and other thought leadership, visit www.ashurst.com/digitalassets.
