Shaping the Future: Digital Asset Policy and Growth Outlook for 2025

 

 

 

Delivered at the Singapore FinTech Festival, this panel tackled key policies and trends expected to shape the future of digital assets in 2025. The panellists shared insights on regulatory harmonisation, technological platforms, stablecoins, and the evolving role of CBDCs, as well as how crypto and AI might intersect in the near future.

 

Key Highlights

Platforms and Macro-Financial Stability

  • Tommaso Mancini-Griffoli, Division Chief of the Payments, Currencies, and Infrastructure Division, International Monetary Fund: Outlined different settlement models for digital assets and the macro-financial implications of these platforms.
  • Single Ledger Model: Offers benefits like greater liquidity and lower search costs but comes with complex governance issues.
  • Multiple Ledgers Model: Requires technology to facilitate communication between ledgers, raising questions of interoperability.
  • Large Intermediary Model: Involves settling assets on an intermediary's balance sheet, a common practice today.
  • Considerations: Emphasised the importance of policy guidance to mitigate risks such as currency substitution and ensure market stability.

Regulatory Trends and Global Coordination

  • Vishal Sacheendran, Head of Regional Markets, Binance, described the evolution of crypto regulations as initially driven by consumer protection needs and highlighted the shift from bottom-up to more structured frameworks.
  • Regulatory Competition: Emphasised that jurisdictions like Europe have led the way, but there's a need for more global harmonisation.
  • Industry Perspective: Acknowledged that regulations can attract investment but may also disrupt market dynamics.

The Business Impact of Regulatory Clarity

  • Tom Duff Gordon, VP of International Policy, Coinbase: Stressed that clear regulations can be a catalyst for investment and trust.
  • Benefits of Clarity: Countries like Singapore, Japan, and Korea are reaping the rewards of regulatory frameworks, while others like the US are lagging.
  • Emerging Trends: Discussed the potential for regulation to reshape the competitive landscape, especially in the EU with MECA regulations.

The Role of Political Will

  • US Elections: The panel touched on the impact of recent US elections, noting a bipartisan push for digital asset regulation.
  • Crypto as a Political Topic: Crypto has gained significant traction among voters, and there is now a stronger, pro-digital asset majority in Congress.

Central Bank Digital Currencies (CBDCs)

  • Tommaso Mancini-Griffoli, Division Chief of the Payments, Currencies, and Infrastructure Division, International Monetary Fund: Explained the difference between retail and wholesale CBDCs and their potential impact on financial markets.
  • Retail CBDC: Useful in countries with low banking penetration but less likely in advanced economies.
  • Wholesale CBDC: Could drive the adoption of tokenised assets and reduce transaction costs if implemented effectively.
  • Platform Decisions: Central banks are exploring different models, including issuing CBDCs on existing or new blockchain networks.

The Need for Global Regulatory Harmonisation

  • Lesley Chavkin, Global Head of Public Policy, Paxos: Emphasised the importance of coordinated global regulation and the challenges posed by the lack of US leadership.
  • Singapore’s Regulatory Leadership: Paxos launched its Global Dollar Network in Singapore, drawn to the country's strong regulatory framework.
  • Action Items: Suggested that G7 and G20 collaboration is critical for achieving regulatory harmonisation.

Intersection of Crypto and AI

  • Tom Duff Gordon, VP of International Policy, Coinbase: : Discussed the potential convergence of crypto and AI.
  • AI and Blockchain: Highlighted that AI can scale content, while blockchain scales trust, leading to new use cases like AI agents using crypto wallets for transactions.
  • Future Developments: Expressed optimism about AI and blockchain integration, particularly in areas like automated services and authentication.

Outlook for 2025: Predictions and Trends

  1. Vishal Sacheendran, Head of Regional Markets, Binance: Predicted more regulatory clarity in major jurisdictions like the US and UK, increased education for policymakers, and the need for tech-savvy talent to drive policy innovation.
  2. Tommaso Mancini-Griffoli, Division Chief of the Payments, Currencies, and Infrastructure Division, International Monetary Fund: Hoped for significant advancements in infrastructure, including better interoperability and convergence on common platforms.
  3. Tom Duff Gordon, VP of International Policy, Coinbase: : Anticipated a surge in payment stablecoins and the integration of crypto with AI, creating new opportunities for digital finance.
  4. Lesley Chavkin, Global Head of Public Policy, Paxos: Expected both legislative and regulatory changes in the US, paving the way for deeper engagement between traditional finance and the digital asset space.

 

Closing Remarks

The panellists stressed the need for thoughtful regulation, technological advancements, and strategic global coordination. They also encouraged continued engagement and dialogue among industry leaders, regulators, and the wider community.

 

Speakers:

  • Lesley Chavkin, Global Head of Public Policy, Paxos
  • Tom Duff Gordon, VP of International Policy, Coinbase
  • Tommaso Mancini-Griffoli, Division Chief of the Payments, Currencies, and Infrastructure Division, International Monetary Fund
  • Vishal Sacheendran, Head of Regional Markets, Binance

 

Moderator: 

  • Amanda Wick, Principal, Incite Consulting
 
 

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