The line between crypto markets and blockchain-based finance is blurring
Crypto markets have steadied somewhat after a period of volatility, but their longer-term significance lies in their expanding role in financial infrastructure.
Originally published by Fidelity International
Written by Giselle Lai, Director of Digital Assets, Fidelity International, and Emma Pecenicic, Head of Digital Distribution, Fidelity International.
On the surface, digital assets still look under significant pressure. Markets have improved since hitting long-term lows in late February, but crypto prices remain far from last year’s records and investor sentiment is materially cooler than during the last cycle.
Beneath the volatility, however, a more important structural transition continues to accelerate.
In our view, the defining development in digital assets today is the steady buildout of blockchain-based financial infrastructure. The discussion is increasingly shifting away from whether digital assets matter to how quickly institutions can adapt to the infrastructure transition already underway.
That shift is most visible in tokenisation.
Over the past two years, tokenised real-world assets have expanded roughly 27-fold to more than USD $33 billion globally, spanning Treasury products, private credit, commodities, and increasingly equities. While still small relative to traditional capital markets, the growth trajectory matters more than the absolute size at this stage of adoption.
Regulatory progress and the infrastructure transition
Regulatory developments have helped accelerate institutional momentum. The Genius Act marked an important step to establishing a comprehensive US framework for stablecoins, while the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission have clarified the treatment of several major blockchain tokens as digital commodities. More recently, the SEC approved Nasdaq to support the trading and settlement of tokenised equities and ETFs, reinforcing the direction of travel toward blockchain-enabled capital markets.
Importantly, tokenisation is now evolving beyond the simple digitisation of assets to what many market participants describe as 'composable capital' – a financial environment where tokenised assets can move more seamlessly across trading, collateral, and treasury activities.
However, tokenised finance cannot scale without tokenised liquidity. In our view, the next phase of tokenisation will therefore be focused on the liquidity infrastructure surrounding those assets.
Institutions increasingly recognise that digital cash solutions cannot sacrifice economics for convenience. As more financial activity migrates on-chain, tokenised liquidity solutions that combine real-time settlement with 24/7 trading may ultimately become the connective tissue linking traditional capital markets with digital asset ecosystems.
This is also where the distinction between 'crypto' and 'tokenisation' begins to blur.
While tokenisation has become more of an institutional narrative, blockchain networks are the infrastructure layer enabling the movement of digital value, liquidity, and collateral across the ecosystem. In many respects, crypto is evolving from a primarily price-driven market into financial middleware.
That transition remains uneven, but there are signs of increasing utility across selected crypto assets. Ethereum remains the dominant infrastructure layer for tokenised assets and stablecoin activity due to its network depth, developer ecosystem, and institutional integrations. Other blockchain networks, including Solana, continue to gain traction by competing more aggressively on throughput and transaction efficiency, although institutional adoption remains comparatively earlier-stage.
Stablecoin dynamics also highlight the growing role of blockchain networks beyond trading activity, particularly across payments, settlement, and collateral mobility.
Since the deleveraging event in late 2025, stablecoin market capitalisation has remained near all-time highs at above $300bn, even as total crypto market capitalisation has fallen. This suggests that while sentiment has cooled, a meaningful share of capital remains on-chain rather than exiting the ecosystem entirely.
Rule for the future
The broader point is that while tokenisation may increasingly be the institutional narrative, blockchain networks are something more important than that: the infrastructure layer underpinning how digital value moves across the ecosystem. Cryptoassets are gradually evolving into components of a broader financial architecture that may ultimately reshape how assets are issued, transferred, collateralised, and settled globally.
For the institutions doing the implementation, it is important to remember a number of things at this stage.
First, there are no shortcuts. Specifically on fund tokenisation, we are effectively re-designing roles historically performed by transfer agents, fund administrators, custodians, and distributors — redesigning them around on-chain data and programmable workflows. That shift requires partners across those roles with genuine on-chain operating capability, backed by institutional-grade processes and controls.
Second, new infrastructure must be checked and verified. Institutions need to evaluate whether infrastructure is secure, resilient, and compliant, and whether it can integrate sustainably into the broader financial ecosystem. It must deliver a high-quality experience for institutional investors that goes beyond technical functionality.
This demands an extra degree of care from all those involved. Tokenisation introduces a multi-party environment where governance, accountability, and operational alignment become vital to avoid oversight gaps.
The long-term winners are unlikely to be determined simply by who tokenises assets first, but by who solves genuine investor and market inefficiencies most effectively. Digital-native operating models increasingly matter because they enable functionality that traditional infrastructure struggles to deliver efficiently — including real-time settlement, collateral mobility, programmability, and continuous liquidity. At the same time, the interconnection between tokenised assets, stablecoins, wallets, exchanges, and blockchain networks is becoming more critical. Fragmented systems and siloed building blocks ultimately limit the efficiency gains tokenisation is designed to achieve.
But the sheer fact that we are now examining and implementing this infrastructure at this level suggests strongly that while the market may still appear cyclical on the surface, underneath, the transition toward blockchain-based finance continues to advance.
