Trends in FinTech 2025
Bingzhen Song, Research Manager on the Chambers FinTech team, discusses the main trends in the FinTech market from this year's research.
“It’s been a really interesting year. Last year was pretty quiet, in the ‘Crypto Winter’. But last fall, late quarter into this year, things really picked up.”
- US FinTech Lawyer
“We are seeing a quiet market overall, particularly on the PE and VC side, but that is now ramping up and it is now getting consistently busier.”
- UK FinTech Lawyer
“The crypto market has gone through a period of ‘Crypto Winter’, people kind of call it a ‘Crypto Spring’ now. The robust firms with good control and good compliance measures are continuing to grow.”
- Singapore FinTech Lawyer
On the heels of Donald Trump’s recent victory in the U.S. election, the crypto market has surged in a continuous rally, in anticipation of president-elect Trump’s crypto-friendly policies. As early as June to September 2024, however, our FinTech researchers had already noticed a markedly more optimistic blockchain and crypto market compared to the one in 2023. In particular, interviewees this year have seen a surge of interest in tokenisation of real world assets (RWA), increased investments from traditional financial institutions, and above all, a growing maturity of the blockchain and crypto market.
Enter the traditional financial institutions
“Every change, evolution, is driven by increased institutional buy-in, improving regulatory clarity, maturity in terms of infrastructure, and a lot of competition. Each of those things winds up driving activity.”
- US FinTech Lawyer
Interviewees highlighted the entry of large traditional financial institutions (TradFi) as a milestone. A US FinTech lawyer stated, “the industry has matured dramatically from when I started doing FinTech and Blockchain; we’ve come a lot further. If you told me [then] Larry Fink of BlackRock would use the term ‘tokenisation’ as much as he does, I would’ve laughed at you.”
The world’s largest asset manager, BlackRock, has made high profile moves in blockchain and crypto in recent years following its CEO Larry Fink’s shifted stance on digital assets. BlackRock’s iShares Bitcoin Trust (IBIT), launched alongside ten other Bitcoin ETFs with the SEC’s landmark approval of Spot Bitcoin ETPs, met significant market interest and recently surpassed its iShares Gold Trust (IAU) in net assets. Similarly, other traditional financial institutions have either moved into or deepened their commitment to the blockchain and crypto market, the most prominent of whom include JPMorgan, Deutsche Bank, Franklin Templeton and Goldman Sachs.
As traditional financial institutions make their moves into blockchain and crypto, many of them have opted to partner up with FinTechs. Many interviewees, including this US FinTech lawyer, have highlighted an increasing convergence between TradFi and FinTechs, “Crypto exchanges need more TradFi representation, and our large financial institutions are bridging into crypto product. Both crypto and TradFi are overlapping in terms of the products and services we do for them.”
In the payments and lending sector, these FinTech-Bank partnerships have recently come under increased scrutiny by the regulators, triggered by the collapse of Synapse, a Banking-as-a-Service (BaaS) FinTech startup who partnered with several banks but lost $85 million in depositors’ funds. A US FinTech lawyer told our researcher that, “that’s accelerated the regulators’ extreme pressure, and the banking regulators issued a request for information, a precursor to significant rule-making. A lot of larger FinTechs are thinking of this as a potential risk, and some banks may decide that BaaS is not worth the regulatory pressure.”
Another theme highlighted by interviewees is the maturation of infrastructure and projects in blockchain and crypto. For one, the tech simply got better: blockchains are now able to process more than 50 times as many transactions per second as they could four years ago, and the rise of layer-2 solutions has helped reduce transactional costs. In addition to the tech infrastructure, interviewees have noticed a maturing market infrastructure, with improved projects. An Austrian lawyer said, “Crypto came back. It was dead for a while and a lot of projects were struggling. The projects have now matured quite a lot compared to before, now we are seeing a lot of startups providing ancillary services to crypto asset providers.”
The crypto custody market, for example, has seen rapid growth lately and is projected to see stronger growth. Some banks such as HSBC and BNY Mellon have already launched their own crypto custody platforms, while others had been waiting for clearer regulatory guidance. But guidance from EU’s Markets in Crypto Assets (MiCA) on crypto custody has provided regulatory clarity for EU entities and a benchmark for non-EU regulators.
2024: The Year of Tokenisation
“The strongest trend for the year is tokenisation, turning tangible assets into digital tokens. It was focused on real estate, but we are now seeing in all kinds of areas, this democratises finance.”
- US FinTech Lawyer
When researching the FinTech 2025 guide, our researchers collected extensive qualitative data on market trends in over 1,000 interviews with TradFi, FinTech clients and their lawyers. As we wrapped up all FinTech interviews in September, it became clear that stablecoin and tokenisation have been the hottest trends this year.
As shown in the “Key Words in FinTech Market Trends Commentary – Frequency Ranking From FinTech 2024 to 2025” bar chart below, the word “stable” was the 12th and “token” the 17th most cited word in our interviews, a staggering increase in frequency compared to FinTech 2024, by 175 and 158 rankings respectively. This remarkable shift in market sentiment reflects the reality: Tokenised Asset Coalition’s State of Asset Tokenisation 2024 report has put the total size of the tokenised assets market at USD186 billion, a 32% year-to-date increase, and McKinsey estimates the total tokenised market capitalisation, excluding cryptocurrencies and stablecoins, could reach USD2 trillion by 2030.
Real World Asset (RWA) tokenisation creates digital representations (tokens) of real world assets on the blockchain, and promises operational efficiency, composability, and programmability. FinTech lawyers from all over the world have told us this year that RWA tokenisation is the hottest trend they’ve seen this year. A lawyer in Maylasia said, “the hottest sector in Malaysia right now is definitely tokenisation of real world assets… a lot of startups right now are launching different ideas and products… to turn an asset into digital tokens. They can tokenise a trust fund, real estate properties, e-money and carbon trade.” Another FinTech lawyer in the British Virgin Islands told us, “we are seeing more complex tokenisation work … where folks might have issued conventional securities in the past, now they are issuing tokens… it democratises the world of investing because it’s so much easier to go up and buy tokens than it is to buy shares.”
Traditional financial institutions have shown a strong appetite for RWA tokenisation in 2024. Launched in 2021, Franklin Templeton’s tokenised treasury fund FOBXX was the first money-market fund on public blockchain. FOBXX recently became available on Coinbase’s layer-2 blockchain, enabling faster and cheaper transactions than layer-1 blockchains. BlackRock’s launched its first tokenised fund, BUIDL, on the Ethereum network in March, with tokenised assets including cash, US Treasury bills and repurchase agreements in its portfolio. Just six weeks after BUIDL’s launch, it overtook FOBXX to become the largest equity tokenised fund. At the time of writing, in December 2024, BUIDL remains at the top of the chart, with USD517 million AUM, and has just announced its expansion to five additional blockchains. Having piloted a tokenised Variable Capital Company fund in 2023, UBS launched its own tokenised investment fund, uMINT, in November 2024. With the flurry of entries and early successes of tokenised funds, it is difficult to imagine any large financial institution without an RWA tokenisation project in the pipeline.
For stablecoins, the heightened activities and optimism are driven by growing regulatory clarity. A US lawyer told us, “the stablecoin trend is driven by solid guidance of out of New York, regimes in Europe, Singapore and the Middle East.” The headline stablecoin regulation globally this year was EU’s MiCA regulations, which have partially come into effect in June 2023, June 2024, and will fully go into effect by December 2024. MiCA provides clear guidance but has received mixed feedback from the market for its strict regulations on stablecoins, with requirements such as a 1:1 ratio of liquid reserve for fiat-backed stablecoins and a ban on algorithmic stablecoins. A general counsel at a crypto firm argued that MiCA is clear on the black-letter law around crypto, but is not clear on the implementation, and that the operational complexities MiCA imposes on stablecoins will make MiCA difficult to comply with.