2025 Is a Landmark Year for Digital Asset Regulation, but What Does This Mean for the Payments Market?

The Property (Digital Assets etc) Act was passed in the United Kingdom on December 2, clarifying the legal status of digital assets. Addressing an existing gap in U.K. property law, the Act essentially classifies digital assets as a new, third category of personal property, in addition to the existing ones already recognized under U.K. law (physical objects and contractual rights/debts). This means that digital assets such as cryptocurrencies, Non-Fungible Tokens (NFTs), and other blockchain tokens, have become codified rights and can now be recognized as formal property. This will ease friction and legal uncertainty in areas such as ownership and transfer rights, security interests, and recoverability. Further regulation is in the works in the United Kingdom, with forthcoming Bank of England and Financial Conduit Authority (FCA) regimes being developed around Great Britain Pound (GBP)-pegged stablecoins.

The U.K. Act comes a year after the European Union’s (EU) Markets in Crypto-Assets (MiCA) regulation (which covers E-Money Tokens (EMTs) that are pegged to a single fiat currency) and 4 months after the United States passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act). Both the MiCA and GENIUS Act have different focal points than the U.K. one, notably in that they are financial-focused regulations, rather than property law. Covering payment stablecoins (i.e., digital assets that are pegged to a fiat currency—though MiCA has also a broader scope, too), they establish banking-style regulatory requirements around many different aspects, such as reserves, licensing, oversight, transparency, disclosure, and compliance. Despite the differences in these instruments, they all provide structural clarity and a regulatory foundation that is going to drive broader adoption of digital assets and tokenization frameworks.

Undoubtedly, regulation provides a grounded foundation from which markets can prosper legally. It significantly lowers risk by providing consumer protection and, therefore, better stability for growth. Regulation also drives institutional and corporate adoption (e.g., cross-border and supplier payments, Business-to-Business (B2B) settlement and treasury operation)—something that was already under way to some extent, but now can power even greater investor confidence. In the United States, the stablecoin market was hitherto dominated by just two issuers (Tether and USDC); this is likely to change quickly as more issuers, notably banks, have announced they are moving into the space since the GENIUS Act passed. Among others, Bank of America is currently custodying Ripple and Sony Bank filed for a U.S. Office of the Comptroller of the Currency (OCC) application for Connectia Trust. In Europe, about 50-odd MiCA licenses have been granted since the law was passed.

Regulations in other regions are having a similar effect. Japan has had stablecoin-specific regulation since 2023, as have Singapore, Hong Kong, and Brazil. Further regulation is also in the works in the United States, Canada, and Australia, which will help bolster the market (e.g., the Digital Asset Market Clarity Act and the Anti-CBDC Surveillance State Act).

Traditional banks and financial institutions will need to decide quickly on how to integrate stablecoins; as a defensive move to retain leverage in the payment processing business or as an offensive strategy to capture new markets and go head to head with the likes of Tether and USDC, for example. The United Kingdom’s first sterling-backed stablecoin only launched in June 2025, so there is still significant opportunity for banking entities to move in and dominate, but banks here should move quickly as the Financial Conduct Authority launched a special stablecoin cohort as part of its Regulatory Sandbox, inviting companies to come and test their stablecoin products under the new changing U.K. regulatory regime. Fintechs are likely to be fast movers in this space due to their inherent agility in the tech space, and should seek to target underserved markets and use cases where traditional banking infrastructure is slow or expensive (real-time global settlements, micro-remittance, or mobile banking, for example). For stablecoin issuers, the regulations offer legitimacy, but may increase compliance costs, potentially increasing the barriers to entry for small issuers and market consolidation (which has certainly happened in the EU post-MiCA). This benefits established players, but the market is still a lucrative one and will also attract international companies to penetrate the market of regulatory-backed stablecoins pegged to leading fiat currencies such as the Euro, the U.S. Dollar, and the Pound Sterling. For those providing the rails (i.e., the infrastructure that connects the blockchain systems with traditional banking networks such as custodian and orchestration platforms like Fireblocks, Anchorage Digital, Chainalysis, and TRM Labs, but also card and payment providers such as Mastercard and Visa), this is a massive opportunity as stablecoins, and by extension the broader blockchain ecosystem, become part of legitimized global commerce.