For much of the past decade, digital assets developed at speed, often ahead of regulatory frameworks. What has changed is not the pace of innovation, but the level of focus. Regulation has become a clear priority across multiple jurisdictions and across the financial services sector itself and that shift is now shaping how digital assets are designed, governed and scaled.
Across major markets, regulators have moved from informal guidance and supervisory caution to the active development of purpose-built regulatory frameworks for certain digital assets, in particular stablecoins. New regimes such as the EU’s Markets in Crypto-Assets Regulation (MiCA) and stablecoin legislation in the United States sit alongside existing financial services law, extending it where necessary and creating new rules where digital asset activity raises novel risks.
This approach reflects a broader regulatory objective: to bring digital assets within the perimeter of regulated finance without treating them as an entirely separate system. Rather than relying solely on legacy rules, regulators are combining new legislation with established principles around prudential oversight, consumer protection, market integrity and financial stability. That blend is defining how various digital assets can operate at institutional scale.
Regulation as a Strategic Priority
This increased regulatory focus is not about slowing innovation. It is about ensuring that innovation aligns with the realities of the global financial system. As some digital assets move closer to core financial activity, payments, settlement, custody and capital markets, regulators are rightly focused on how these systems operate under stress, how risks are managed, and where accountability sits.
At the same time, financial institutions themselves are demanding clarity. Banks, asset managers and payment providers cannot deploy balance sheet, infrastructure or client-facing products without regulatory certainty. In this context, regulation is not an external constraint, but a prerequisite for meaningful institutional participation.
From Crypto Assets to Regulated Digital Money
One of the clearest outcomes of this shift is the growing distinction between speculative crypto assets and regulated forms of digital money, such as tokenised deposits and regulated stablecoins.
Regulators are increasingly concerned with how digital money functions as money, how it is issued, redeemed, safeguarded and integrated with existing financial systems. This has placed renewed emphasis on preserving core monetary principles, including par-value redemption, liquidity management and robust governance.
As a result, the market is moving away from isolated issuance models toward shared infrastructure that can support multiple issuers, multiple blockchains and multiple receiving institutions. Regulation is encouraging convergence rather than fragmentation, and scale rather than experimentation.
Infrastructure Moves to the Foreground
As regulatory focus increases, the importance of financial market infrastructure becomes impossible to ignore. Tokenised money cannot scale on technology alone; they require clearing, settlement, identity, compliance and governance mechanisms that regulators and institutions recognise and trust.
This is changing how innovation is applied. Instead of building stand-alone platforms, firms are increasingly focused on interoperability between banks and wallets, between blockchains, and between traditional and digital financial systems.
In practical terms, digital asset infrastructure must meet the same expectations as other parts of the financial system: resilience, transparency, auditability and clear lines of responsibility. Regulation is reinforcing these expectations, not inventing them.
Regulation as an Enabler of Scale
There is a persistent narrative that regulation inhibits innovation. In practice, regulation enables the kind of innovation that can scale beyond early adopters.
Regulatory clarity has supported the growth of tokenisation initiatives within capital markets, enabled banks to explore on-chain settlement, and accelerated interest in compliant digital money for cross-border payments and treasury operations. Where frameworks are clear, investment follows and where responsibilities are defined, institutions can engage.
Uncertainty, not regulation, is what holds markets back.
The Path Ahead: Convergence and Coordination
The future of digital assets will be shaped by convergence rather than disruption. Traditional finance and digital asset markets are increasingly solving the same problems: efficiency, transparency, speed and risk management in a global, highly regulated environment.
Regulation provides the common framework that allows these worlds to meet. While approaches will differ across jurisdictions, the direction of travel is consistent: digital assets that align with regulatory priorities will integrate into the financial system; those that do not will remain peripheral.
This places responsibility not only on regulators, but on the industry itself. Firms building digital asset solutions must engage constructively with regulatory objectives, invest in robust infrastructure, and design systems that can operate at institutional scale.
What This Means for the Industry
For business leaders, the implication is clear. The next phase of digital assets will not be won by speed alone, but by credibility, interoperability and trust.
Regulation is now a central shaping force, not because it has overtaken innovation, but because it has become a priority. That priority is defining how digital assets move from promise to permanence within the global financial system.
About the Author
Nicole Sandler is the Chief Ecosystem Officer at Ubyx, focused on building regulated infrastructure for digital money, including tokenised deposits and stablecoins. She works closely with financial institutions, fintechs, policymakers and technology providers at the intersection of regulation, market structure and digital financial innovation.