Regulatory Turning Points and the Institutional Adoption of Crypto

 

This Forbes piece published last month offered explanations for why and how cryptocurrencies and asset tokenization have gone mainstream. Well, brace yourselves because that “mainstreaming” is only accelerating. The transition from a hostile to supportive regulatory environment in 2025 has encouraged widespread institutional adoption and a broadening role for digital assets in global finance. Indeed, mentions of stablecoins in SEC filings surged by more than 60 percent in the months following enactment of the GENIUS Act (as industry analysts note), and major financial institutions began rolling out new product offerings built on blockchain technology.

Major financial institutions, including Citigroup, Fidelity Investments, JPMorgan Chase, Morgan Stanley, Mastercard, and Visa are either offering or developing crypto-enabled products for everyday consumers. These allow customers to buy, sell, and hold digital assets alongside traditional instruments like equities and exchange-traded funds (ETFs). The rise of tokenized funds and exchange-traded products (“ETPs,” which do not include securities)  has helped push the value of on-chain, regulated crypto holdings above $175 billion, which is a 160% increase over last year. These vehicles open the door to participation from institutional money that previously steered clear of crypto due to custodial and compliance frictions. Meanwhile, fintech platforms are busy building out infrastructure for payments, stablecoins, and real-world-asset tokenization.

Analysts project that on-chain capital could surpass $100 trillion within five years, which helps explain why institutional players are racing to develop cash-management solutions for the next generation of digital assets.

The tokenization of traditional assets may be the most impactful trend in the “mainstreaming” story. BlackRock CEO Larry Fink believes the financial industry is “at the beginning of the tokenization of all assets.” The firm is launching a revamped money market fund tailored to meet the requirements of the GENIUS Act, positioning the world’s largest asset manager to serve stablecoin issuers who are obligated to hold high-quality, liquid reserves under the new U.S. regulatory framework. When the world’s largest asset manager commits at this scale, the market takes notice. The infrastructure required – custody, settlement, legal frameworks – is non-trivial, but the signal is clear: tokenized assets are moving from boutique experiment to industrial strategy.

Meanwhile, Morgan Stanley has become one of the clearest examples of crypto’s integration into mainstream wealth management. As of October 2025, Morgan Stanley opened access to crypto funds for all clients – not just high-net-worth individuals – including 401(k) and IRA accounts. The firm’s Global Investment Committee recommended portfolio allocations up to roughly 4% for opportunistic growth profiles. These developments signal that crypto is now seen as an important component of diversified client portfolios, not just speculative “side bets.”

The regulatory and institutional momentum driving these developments supports a fundamental shift in the economics of the internet itself. With regulatory clarity in place, more networks can complete their economic loops (issuing tokens, enabling use, generating revenue for token-holders) and create new economic engines for the internet that are self-sustaining and include broader participation.

This is not to say the future is risk-free. Debate continues in Congress over digital asset policies; passage of legislation and implementation of regulation and rulemaking are still in progress; and institutional adoption will invite closer scrutiny of systems and operations. More rigorous operational, custodial and compliance demands will require significantly more infrastructure investment.

Even so, the trajectory is unmistakable. Crypto is no longer sitting outside the financial system looking in. It is being actively integrated into investment products, payment systems and the broader global financial architecture. The mainstreaming of crypto is well underway.