Anyone who spent Monday at UK Finance’s “New Digital Assets and Money 2025” event would have left with one clear impression: the future of money may be digital, but the landscape around it is still more sketch than blueprint.
Speakers from across finance and technology were enthusiastic about the potential of tokenised money, yet the mood was tempered by the sense that regulators are sprinting to catch up with a race already well underway.
The US is setting the pace. According to Keefe, Bruyette & Woods, American issuers and policymakers are “way ahead of the rest of the world”, particularly in the field of Stablecoins, and they show no sign of giving up that lead.
The global market is already dominated by USD-backed coins, with about 99% of the roughly $270 billion outstanding denominated in dollars. Although there are around 200 Stablecoins in issue, two US players, Tether and Circle’s USDC, account for more than 90% of the total.
Stablecoins themselves were presented as both an opportunity and a competitive threat. They settle instantly, operate around the clock, and offer global reach without the cumbersome frictions of traditional cross-border banking.
The ability to add “programmable conditionality”, where funds are released only when predefined conditions are met, has obvious appeal in trade finance, a use case repeatedly stressed by participants.
Yet there are drawbacks. Holders earn no interest, notwithstanding attempts to mimic yield through reward schemes, and customer protections are thinner than in the banking system.
Security concerns remain too, with one of the largest thefts on record involving the recent loss of $1.5 billion in Stablecoins.
Banks are not standing still. Their emerging countermeasure, Commercial Bank Tokenised Deposits, is essentially a digital representation of balances held at a regulated lender. CBTDs pay interest and come with the protections familiar to bank customers, but they introduce operational headaches.
For the system to work smoothly, banks need to agree common standards so that tokens issued by one institution can be used seamlessly with another’s.
Those interoperability challenges mean adoption is likely to start with large global lenders or to be confined to localised networks for now. KYC and anti-money-laundering checks still apply at every step, so efficiencies are not as immediate as some might hope.
Central Bank Digital Currencies, once the star of conference circuits, barely featured. Four years ago CBDCs were touted as the inevitable future, but KBW notes that international compatibility issues, the absence of interest payments and worries over state access to personal data have dulled enthusiasm.
Regulation is emerging in patches rather than a coherent global framework. The US has already passed its GENIUS Act, creating a bespoke regulatory regime for Stablecoin issuers.
The EU’s Markets in Crypto-Assets (MiCA) rules set out a more demanding framework, reportedly leaving Tether non-compliant under current standards. The UK, meanwhile, remains in consultation mode, with the Bank of England publishing its latest paper only this week.
If there was a conclusion to be drawn from the event, it is that digital money is no longer a theoretical debate but a live competitive arena.
Stablecoins may have the early lead, driven by US dominance, but banks are preparing their own response, and regulators everywhere are scrambling to get the whistle ready.