In certain instances, we may earn revenue when a reader makes a purchase or completes a form through our pages or on a partner’s website. We adhere to a strict Institutional investors are increasing their exposure to cryptocurrency, as they have gained confidence in managing digital currencies as assets.
Crypto exchanges Kucoin and BitGo Singapore have recognized this, forming a partnership that allows institutional clients to trade on KuCoin without the need to pre-fund exchange wallets. The assets are held securely in regulated custody by BitGo Singapore. This setup enhances security and diversifies counterparty and systemic risks. “Security and trust are the foundation for institutional adoption,” said Tika Lum, Head of Institutional Business Development at KuCoin.
Institutions are also increasingly involved in tokenization, launching their own blockchain-based tokens to move assets around. JPMorgan Chase is piloting a new deposit token, JPMD, on Base, a public Ethereum-based blockchain managed by US crypto exchange Coinbase. The token will only be available to the bank’s institutional clients. It will be used to settle transfers around the clock and make cross-border business-to-business payments.
Around 76% of institutions intend to invest in some form of tokenized assets by 2026, according to Coinbase’s 2025 State of Crypto Report. The report highlights three key trends for the industry this year: increasing institutional adoption of crypto, an expansion in stablecoin and other tokenized asset use, and rapidly growing small business involvement.
Key Takeaways
- 2025 has marked crypto’s turning point, driven by the surge of digital asset adoption, real-world tokenization, and growing institutional and small business engagement.
- Consumers, institutions, and small and medium businesses (SMBs) have identified stablecoins as a solution to address their biggest financial pain points.
- 2025 is shaping up to be the breakout year for stablecoins. There are now more than 161 million stablecoin holders globally, driving a 54% growth in global stablecoin supply in the past year.
Institutional Interest Set to Diversify
The crypto market outlook in 2025 for institutional adoption reflects a rise in digital asset allocation and a growing interest in tokenization.
The launch of exchange-traded funds (ETFs) last year attracted new interest in cryptocurrencies as a legitimate asset for institutional investing. The Bitcoin and Ethereum ETFs are among the most successful ETFs ever launched. The top 10 Bitcoin ETFs totaled $50 billion in cumulative inflows, double the cumulative inflows of the all-time top 10 ETFs in their first year, according to the report.
ETF volumes are driven by retail investors, who hold around 79% of Bitcoin ETFs. But during their first three quarters after launch, Bitcoin ETFs outpaced other top-performing ETFs in institutional assets under management and holders.
Source: Institutional Investor Digital Assets Survey, Coinbase in collaboration with the EY-Parthenon practice, January 2025
Stablecoins are managed by companies such as Tether with its USDT and Circle with USDC, and are primarily used by retail investors for trading, remittances, and as a store of value.
In contrast, deposit tokens – like JPMD – are issued by licensed banks for integration into existing institutional financial systems, to be used by institutional clients.
Why are institutions so focused on tokenizing assets?
Tokenization of Real-World Assets
Real-world asset tokenization has long been promised as a practical application that would drive mainstream adoption of cryptocurrency beyond tech enthusiasts.
This use case is taking off as tokenization expanded 245-fold from $85 million in April 2020 to over $21 billion by April 2025, according to Coinbase. Private credit dominates, accounting for 61% of total tokenized assets, followed by treasuries at 30%, commodities taking 7%, and institutional funds 2%.
RWAs are expected to expand across many different business use cases as the space matures. Examples include:
- Tokenized treasuries/cash management: Offers businesses yield on idle cash with faster settlement, programmability, and real-time reporting. Web3-native operations can earn yield without moving funds off-chain.
- Tokenized invoices/accounts receivables: Tokenizing invoices can remove bottlenecks and unlock liquidity. Smart contracts can automate payment tracking and enforce terms while reducing fraud and administrative work.
- Tokenized private credit: Enables broader participation by reducing issuance and investment minimums that have typically limited private credit to large institutions and high-net-worth investors.
While institutions and large businesses focus on tokenization, small and medium-sized businesses (SMBs) are moving on-chain at a faster rate by incorporating the use of stablecoins in an attempt to simplify their financial transactions.
Stablecoin Adoption Expands to Address Financial Pain Points
Stablecoins have emerged as a primary driver of blockchain use cases, facilitating faster global money movement, updating outdated financial systems, and driving the next wave of digital financial integration.
Stablecoins are considered more stable than other forms of cryptocurrency, like Bitcoin (BTC), and major companies like Meta and Google have indicated they could incorporate stablecoins into their payment structures.
Total stablecoin supply worldwide reached $247 billion at the end of May 2025, an increase of close to 54% from 2024. That was equivalent to just under 10% of US currency in circulation as of early May, according to the report.
There were over 160 million stablecoin holders in May 2025 – more than the 142 million combined users of the “big four” mobile banking apps in the US offered by JPMorgan, Bank of America, Wells Fargo, and Citibank.
The two highest monthly stablecoin transfer volumes occurred in the last year, according to research conducted for Coinbase by The Block Pro Research. December 2024 set a monthly volume record of $719 billion, and April 2025 approached that level with $717.1 billion.
This growth is driven by the belief among SMBs, as well as Fortune 500 companies and individuals, that stablecoins can help address some of their biggest financial pain points, such as fees and transaction processing.
The number of SMBs using crypto has doubled to 34% this year from 17% in 2024, and the number using stablecoins has more than doubled to 18% from 8% last year.
Around 36% of SMBs have received requests from customers, employees, or vendors and suppliers to use stablecoins, up from 17% a year ago.
This demand is likely to intensify in the future, as around 81% of SMBs expressed interest in using stablecoins in their business, up from 61% a year ago.
Source: Small and Medium Business Survey, Coinbase by NRG Research, April 2024 and April 2025.
Stablecoins can address SMB financial pain points in several ways:
- Remittances: Stablecoins enable near-instant, low-cost cross-border transfers that bypass traditional banking intermediaries.
- Payment processing fees: Accepting payments in stablecoins can lower transaction costs by bypassing traditional credit card networks, which charge 1.5% to 3.5% to process each transaction.
- Global payroll: Stablecoins allow companies to pay employees and contractors worldwide quickly and securely, reducing the burden of navigating multiple currencies, banking systems, and regulations.
- Inflation protection: Stablecoins provide access to a digital asset that maintains a stable value, typically pegged to the US dollar.
- Unbanked and underbanked: Stablecoins can give migrants or individuals in regions with limited banking infrastructure the ability to send and receive money, store value, and access global financial networks without a traditional bank account.
Fortune 500 companies naturally take a more cautious approach to adoption, with 7% of executives stating that their company currently uses or holds stablecoins and 29% stating that their company is interested or plans to use stablecoins, a threefold increase from 8% in 2024.
Two-thirds state that stablecoins could be part of a solution to offer their customers faster payments with lower fees.
A growing number are incorporating on-chain initiatives, such as payments and settlements, supply chain management, and blockchain infrastructure, into their operations.
Source: Web3 Adoption Research, Coinbase by GLG Research, April 2025
Nearly one-fifth of Fortune 500 executives consider on-chain initiatives to be a key part of their company’s strategy, a 47% increase from last year.
Financial service and technology companies naturally remain the industries that account for the most on-chain initiatives. But the period from the third quarter of 2024 through the first quarter of 2025 saw increasing diversification into automotive and transportation, retail, food and beverage, and healthcare companies.
The Need for Regulatory Clarity
This reflects the critical role of regulation to unlock the potential of cryptocurrency, Web3, and blockchain technologies in the US.
According to 67% of Fortune 500 executives, uncertainty about regulation is a hurdle to adopting stablecoins, while around 54% state that concerns around regulation are a barrier to adopting on-chain technology. Unsurprisingly, 9 in 10 agree that clear, consistent regulation is essential to support ongoing innovation.
For SMBs, clarity is even more important for adoption. Nearly 72% would be more likely to consider using cryptocurrency in their business if there were a clear market structure around business use.
Legislation is emerging in the US, including the GENIUS Act stablecoin bill that recently passed in the US Senate and is making its way to the House of Representatives for final passage.
There is also significant activity at the state level, as 38 states have either passed or are considering more than 131 bills to legislate Bitcoin and broader cryptocurrency use.
Coinbase stated:
“It is past time for a regulatory unlock that will strengthen broader crypto, and we welcome legislation that protects consumers and encourages innovation and adoption. It’s clear that greater regulatory certainty is still required for the potential of crypto to be fully realized. That’s why passing market structure and stablecoin legislation is so critical to the future of crypto innovation in America.”
The Bottom Line
This year has marked a turning point in cryptocurrency adoption, driven by growing institutional and small business engagement in digital asset use and real-world tokenization.
Institutions are increasingly confident in digital assets, as around 83% plan to increase their exposure to crypto this year and 76% plan to invest in tokenized assets by next year. Institutional cryptocurrencies, such as tokens issued by JPMorgan, are on the rise.
SMBs in particular are leading the way in adopting stablecoins as a solution to financial pain points such as high fees and transaction processing times, and managing cross-border payments.
The key to supporting further adoption and innovation is passing clear legislation to give more businesses the confidence to incorporate digital assets into their financial systems.
