Banks, Regulators Accelerate Tokenisation Push As Stablecoin And RWA Markets Expand

Global financial institutions are accelerating efforts to build blockchain-based settlement systems and tokenised money products, intensifying competition with stablecoins even as regulators move to tighten oversight of digital assets, industry developments and policy signals show.

Large banking groups are expanding pilots of tokenised deposit systems designed to enable real-time payments and cross-border settlement within regulated bank networks. The initiatives aim to replicate some efficiencies of stablecoins — such as 24/7 transferability and near-instant settlement — while keeping funds within traditional balance sheets. The push reflects growing concern among banks that public stablecoins could become dominant payment rails if regulatory frameworks mature faster in crypto markets than in traditional finance. In response, banks are increasingly positioning tokenised deposits as a compliant alternative, effectively creating parallel digital money systems.

At the same time, stablecoins are drawing heightened regulatory attention across major jurisdictions. Policymakers are shifting their focus toward integrating stablecoins into formal payments regulation, with emphasis on reserve backing quality, redemption guarantees and systemic risk controls. Industry participants say stablecoins are increasingly being treated as core payment infrastructure rather than speculative crypto instruments. Alongside digital money innovation, real-world asset (RWA) tokenisation is expanding across capital markets. Tokenised U.S. Treasuries and money market funds remain the largest segment, while private credit and fund units are emerging as fast-growing categories in institutional pilots.

Financial institutions are exploring tokenisation for faster settlement, improved collateral mobility and continuous liquidity in traditionally illiquid markets. However, analysts note that secondary market liquidity remains limited, with most activity concentrated among institutional participants rather than retail investors.

Despite competition from newer blockchain networks, Ethereum and compatible ecosystems continue to dominate institutional tokenisation projects, supported by established custody solutions and developer infrastructure.

In Asia, India is emerging as a notable test case for regulated digital asset infrastructure. The country is positioning its Gujarat International Finance Tec-City (GIFT City) as a controlled sandbox for tokenised bonds, digital fund units and institutional blockchain settlement systems. Indian policymakers are also examining potential frameworks for INR-linked digital tokens, although no private stablecoins have been approved. The Reserve Bank of India continues to prioritise its central bank digital currency, the digital rupee, as the foundation of its digital money strategy.

Market participants say the combined momentum in tokenised deposits, stablecoins and RWAs signals a structural shift toward blockchain-based financial infrastructure, even as regulatory approaches diverge across jurisdictions.