Opinion by: Kevin de Patoul, co-founder and CEO of Keyrock
Crypto feels oddly familiar these days. Real-world assets (RWAs), tokenized funds, and on-chain treasuries are buzzwords we’ve discussed for years. In 2022, amid inflated hype and slow adoption, a report by BCG estimated that tokenized assets could hit $16 trillion by 2030, while the current market cap sits at $50 billion in 2025.
This time feels different, not just because major players like BlackRock are launching tokenized money market funds or Circle’s USDC has become the go-to settlement layer for Treasury bonds on-chain.
The narrative has finally aligned with reality: actual businesses, genuine cash flows, and meaningful compliance.
However, despite this momentum, the industry still hangs on the precipice of regression due to the quest for an ideal regulatory framework.
Progress requires iteration, not perfection
The future of finance is digital. Every asset class, from bonds to real estate, is bound to be tokenized, and it must deliver more than just a digital replica. Digitization promises faster, cheaper, and more accessible markets.
This means little if institutions cannot allocate capital on a large scale. Institutions generally shy away from uncertainty. The issue isn’t a lack of action from regulators; rather, it’s that the current strategy emphasizes theoretical completeness over practical clarity.
Related: Stablecoin laws aren’t aligned — and big fish benefit
While universal frameworks, smooth cross-border rules, and global harmonization seem appealing on paper, in reality, they lead to stagnation. There’s talk of TradFi having a “global regime,” but its accuracy is questionable. Basel III in Europe isn’t identical to US banking regulations. Crypto isn’t uniquely fractured; global finance itself is compartmentalized. Awaiting a mythical, one-size-fits-all solution will only hinder progress.
This fragmentation is evident in key markets. In the US, tokenized equities are defined as securities. MiCA offers a comprehensive playbook in Europe, though its limitations are already apparent, particularly in DeFi. Singapore permits tokenized bonds for institutional investors, yet restricts open retail participation.
These instances are not regulatory failures but reflect the evolution of regulation. The challenge lies not in regulatory ambiguity, but in a lack of market infrastructure and robust demand, with systems in place but underutilized. Markets can function with imperfect rules; they cannot thrive if everyone remains inactive.
The cost of waiting
Institutions hesitate not due to blockchain aversion but because no one wants to justify to a board or regulator why they’ve supported assets that might later violate existing laws.
The costs for banks stem from the need to dismantle and rebuild, complicating the justification for that overhaul in what they still perceive as a niche market. In some regions, capital and services can be engaged confidently. In others, even slight licensing issues compel players to hold back.
Uncertainty doesn’t merely slow adoption; it inflates legal costs, forces firms to ring-fence entire business units, and hampers cross-border liquidity. Each jurisdiction turns into its own legal labyrinth. This extends beyond a technology issue; it’s a fundamental, systemic problem of regulatory clarity.
Clarity unlocks capital, even if it’s messy
In truth, crypto doesn’t require ideal global regulation to flourish. Traditional capital markets have operated for years under frameworks lacking uniformity. What matters is a basic level of clarity and consistency, enough for firms to evaluate and price risk. Consider shadow banking: a $60 trillion ecosystem that exists parallel to, not outside, formal regulation. It’s complex and imperfect, yet it works.
This isn’t about deregulation; it’s about distinguishing between essential safeguards and unattainable idealism. Fraud prevention and investor protection are important but don’t necessitate a flawless global framework.
For regulators, the way forward involves prioritizing iterative clarity and publishing rules, even if they are subject to change. Progress today is preferable to perfection tomorrow. For financial institutions, the biggest risk is lagging; tokenization won’t wait for certainty, and nimble players are already establishing themselves in jurisdictions that offer workable guidelines. For crypto innovators, the task is to stop awaiting external validation and operate within existing legal frameworks while actively advocating for gradual improvements.
Tokenization solves real problems — if we let it
Tokenization’s value transcends mere novelty for crypto enthusiasts. It addresses significant challenges — lengthy settlement times, capital locked in reconciliations, and asset classes obstructed by jurisdictional barriers.
Stablecoins have demonstrated the path forward. With regulatory clarity, even if imperfect, adoption can surge. Tokenized securities could follow suit, provided we stop viewing regulation as a binary choice between “perfect” and “broken.” Some may argue this is settling for mediocrity, but iterative progress is how financial systems evolve.
From theory to reality
Crypto has evolved beyond speculative fads. We are now in a realm of cash-positive businesses moving real money on-chain. If ever there was a time to embrace iterative progress, it is now. The firms ready to operate within a clear, albeit evolving, regulatory landscape will shape the future of finance.
Progress is about momentum, not perfection. If the industry remains sidelined, awaiting comprehensive frameworks, the digital asset revolution will remain frustratingly theoretical.
Opinion by: Kevin de Patoul, co-founder and CEO of Keyrock.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
