The passage of the GENIUS act in July 2025 represented the first step in positioning America to be a leader in digital assets by clarifying how a regulated stablecoin would look. A stablecoin is a type of cryptocurrency designed to have a stable value, typically by being pegged to a real-world asset like a fiat currency (e.g., U.S. dollar) or a commodity. Having a way to move funds more easily in near real time without relying on the traditional banking infrastructure removes friction from the settlement process.
Tokenized securities also received a boost when the SEC issued a ‘no action’ letter to DTCC in December 2025. This will allow them to offer, under federal securities laws and regulations, tokenize DTC-custodied assets in a controlled production environment on pre-approved blockchains. DTCC is targeting the launch of this service in H2 2026. Frank La Salla, President and CEO of DTCC told CNBC ‘It’s natural for the industry begin to look at blockchain as the next generation of software to carry assets’.
What is the GENUS Act?
The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act was intended to define the framework in which organizations can issue a stablecoin. Based on this regulation, coins are required to have 100% reserve backing with liquid assets like U.S. dollars or short-term Treasuries and requires issuers to make monthly, public disclosures of the composition of reserves. It also mandates compliance with strict marketing rules to protect consumers from deceptive practices such as claiming that an issuer’s stablecoins are backed by the U.S. government, is federally insured, or legal tender. The regulation also required that stablecoins be issued by insured depository institutions, regulated by their primary federal regulator (e.g., Fed, FDIC, OCC) or a state banking regulator through an exception process.
It’s natural for the industry begin to look at blockchain as the next generation of software to carry assets.
— Frank La Salla, President and CEO of DTCC
Traditional cryptocurrencies are not without risk
Recent input from the SEC and the New York Department of Financial Services on their expectations could be partially responsible for Bitcoin hitting $126,000 in October, it has not stopped crypto volatility. Bitcoin started 2025 at over $94.4K and ended at $88.7 with several major price movements in short periods of time.
Despite allowing for an allocation to these assets, Merrill Lynch issued a warning in a recent regulatory filing because of a sizable portion of the demand for crypto assets is generated by speculators and investors seeking to profit from short-term holdings. They stated that “Media headlines, tweets, or influencers’ opinions can significantly influence performance given the speculative nature of cryptocurrency.”
What else makes today different?
Regulation, including an August 2025 Executive Order directing Treasury, Labor, and SEC to enable crypto in retirement solutions, is clearly the catalyst to increased interest. Rightly or wrongly, institutional investors see crypto as a store of value or hedge against inflation.
This is causing large, traditional firms to deliver solutions to the market. BNY has taken the first step in tokenizing deposits by enabling a mirrored on-chain representation of client deposits on its Digital Assets platform. Carolyn Weinberg, BNY’s chief product and innovation officer said, ‘This is very much about connecting traditional banking infrastructure and traditional banking institutions with emerging digital rails and digital ecosystem participants in a way that institutions trust,”.
State Street also announced the launch of their digital asset platform which will provide.
wallet management, custodial, and cash capabilities, designed to support tokenized product development.
This is very much about connecting traditional banking infrastructure and traditional banking institutions with emerging digital rails and digital ecosystem participants in a way that institutions trust.
— Carolyn Weinberg, Chief Product and Innovation Officer, BNY
Call to action
While some organizations may not feel that exposing their clients or firm to cryptocurrency is prudent, a do-nothing strategy is not wise. Tokenized securities and stablecoins will be part of the investment ecosystem in the near future. Even Jamie Dimon has acknowledged that crypto, blockchain, and stablecoins are “real”. Firms need to be proactive to stay competitive.
Develop an understanding of stablecoins and tokenized securities
We are past the if and heading to the when, especially when it comes to stablecoins and tokenization. It is important for leaders at all levels and client facing teams to be able to have an educated conversation on the impact of stablecoins with their clients. Start with a review of the GENUIS act which provides the foundation. Learn the mechanics of the blockchain to know what will be needed to support the transacting and custody of a digital asset.
Evaluate your partner’s readiness to process stablecoins
Every organization relies heavily on partners for some or all their ecosystem. A reliance on a partner means a dependence on their strategy to look forward to the future needs of their clients. Many of the major banks have been public about their planning. Do your key vendors have a plan? Can they provide you with details on their strategy? Can they articulate what they can and cannot do? This goes well beyond supporting the eight or more decimals to allow for small purchases. It is about creating a foundation to stay relevant.
Define your strategy
Starting execution without defining your strategy is the same as ‘ready, fire, aim’. By developing an understanding of the problems needing to be solved and understanding what solutions are available, will provide the data to create an informed strategy. Defining a strategy does not mean you need to immediately execute upon it. What it does is allow you to have educated conversions on the topic and create the plan that will be executed.
