2022 was a whirlwind year for crypto, to say the least.
While the year started off strong, with real technological advancements and excitement about its potential, there were noticeable challenges. Overnight support in the millions to Ukraine, 1 billion donated in COVID relief, and legislative gains in the EU and Asia, were accompanied by headlines around Terra Luna, Celsius, and Three Arrows. At the end of the year, the latestrevelations about FTX and the alleged criminal activity of a small group of people within the company sent massive shockwaves through the entire crypto industry. Given its importance in the space, thecontagion and fallout may not be over.
If there is one message that came across loud and clear, it’s that regulatory clarity is needed – and it’s needed now.
The financial services industry is experiencing an unprecedented AI investment boom that signals a fundamental shift in how institutions operate. According to Allied Market Research, AI in financial services reached $13.7 billion in 2023 and is projected to surge to $123.2 billion by 2032.
What happens when billions of dollars move at the speed of code? According to the Bank for International Settlements (BIS), the effect on U.S. Treasury markets is material—and not necessarily benign. A $3.5 billion inflow into stablecoins caused 3-month Treasury yields to drop by 2 basis points (BPS); the same volume flowing out led to a 6 BPS increase. This isn't background market noise—it’s a measurable monetary signal, revealing the capacity of code to co-opt traditional policy tools.
Cryptocurrency scams cost investors an estimated $9.9 – $10.7 billion globally in 2024, driven largely by AI-generated fraud and pig butchering schemes. Generative AI has industrialized fraud at an unprecedented scale, exploiting crypto’s decentralized nature with deepfake impersonations, phishing exploits, and automated chatbots.
"Nothing is permanent except change." - Heraclitus
Introduction: The Great Unbundling
There was a time when some of the largest technology companies believed that they had unique ability to tackle the major regulated industry challenges. The industry demanded greater efficiency, risk management and global availability, among the core requirements. Many of those legacy providers built moats that were deep and well fortified. Slowly, change began to take place.
The digital identity and risk decisioning landscape stands at a critical inflection point—a moment where traditional fraud prevention measures have become alarmingly vulnerable to sophisticated attacks. As cybercriminals harness AI and automation to bypass conventional security measures, organizations aren't just falling behind—they're facing an existential threat to their digital trust infrastructure.
The Administration, Congress, and regulators continue to advance efforts to establish legal and regulatory clarity for digital assets in the United States. The recent passage of the Guiding and Establishing National Innovation for US Stablecoins of 2025 Act (GENIUS Act), on 18 July 2025 was a significant milestone and
cleared the way for the more challenging task of addressing digital asset market structure legislation.
Foundational financial infrastructure is being rearchitected with new modern digital primitives - blockchain technology as a new global transparent ledger and currency backed stablecoins as the medium for value transfer. Stablecoins promise an instantaneous, inexpensive and unrestricted means to transact anytime and anywhere using a currency-backed token. Still, despite growing optimism, stablecoins today remain largely dependent on the same legacy financial rails it claims to disrupt, and the competitive advantages or value propositions vary between geographic regions and transaction types.
Tokenization is no longer a futuristic concept relegated to the fringes of finance. It is rapidly emerging as a transformative force with the potential to reshape how we own, trade, and manage assets. While the initial hype surrounding blockchain1 and cryptocurrencies may have obscured tokenization’s true potential, its underlying principles of fractionalization, automation, and enhanced transparency are poised to unlock unprecedented opportunities for investors, businesses, and the global economy. 2 3
Artificial Intelligence (AI) is not just another emerging technology. It is a new production function, reducing the cost and spread of cognition in the same way electrification reduced the cost and spread utilization of power. For banks, this shift brings both exponential opportunities and existential risks. The winners will be those that embed AI as a core operating model. The losers risk losing relevance in a market increasingly defined by AI-native fintechs and forward-leaning incumbents.
