TOKEN2049 has long been the Schelling point of Asia’s conference season, but this year felt different. TradFi showed up in force, with the CEOs of Nasdaq and Franklin Templeton and senior leaders from BlackRock and Morgan Stanley in attendance.
The conversations shifted too: less crypto natives touting potential, more TradFi excited about how the technology improves their own offerings.
Everything we expected crypto to do for finance over the past five years is finally playing out, slowly but accelerating fast.
With 6 stages, 250+ speakers, 600 side events and ~25,000 attendees, plenty was easy to miss. Here’s a round up of what we believe were the most important conversations from TOKEN2049.
Tokenization
Last year, RWAs barely came up, with on-chain activity surrounding them near zero. This year, they were named on almost each and every panel.
Whether the topic was regulation, privacy or capital flows, tokenization seeped into the discussion. Speakers weren’t just crypto-native firms but TradFi ones, from the likes of Nasdaq, Invesco and CME Group.
The tokenization takeover is rolling out in two phases:
Phase 1 is the wrapper: stablecoins and tokenized versions of existing assets. This is where most tokenized assets sit today.
Phase 2 is native issuance on-chain, with Securitize named as a best in class example. As regulatory frameworks become clearer, this is where we’re heading.
Panelists were blunt that tokenization for tokenization’s sake does nothing, with industry leaders most looking forward to the transformation of asset classes that are illiquid today.
Liquid assets are largely a solved problem: access to ownership of the world’s most traded companies, the largest ETFs, and so on. The unlock is creating more liquid markets for illiquid assets, for market participants and holders alike. Think private companies, equity markets of smaller nations (Nigeria, Brazil), real estate, and emerging asset classes without formalized trading venues.
The strongest case for adoption was having these assets act as building blocks for financial products. Two main paths are expected: using tokenized assets as collateral, and creating net new structured products.
On collateral, assets can be yield-generating, and holders can execute trades without selling what they own. One big benefit of 24/7 markets and faster settlement is the efficiency of the whole system: shorter settlement raises asset velocity, margin calls resolve faster, and less collateral needs to be posted.
On structured products, much of today’s demand for equity comes through financial products built on top of it. New ones become possible when tokenized assets converge with DeFi primitives. Attractive products drive demand, which increases the need for tokenized assets.
The trading of oil across the weekend was the example of a new market that pulls in new money. Crypto exchanges running continuous markets are what push traditional firms to keep up.
However, three things are slowing progress:
Operations. Integrating the technology is quick. Redesigning how those markets operate is not, and many teams aren’t ready.
Issuance. Models are split between permissionless and official, with no shared standard. Panelists expect two parallel worlds.
Regulation. One panelist said rules flip every two to four years, which makes large commitments hard to justify.
Despite the mindshare, every panel that raised the topic recognized that tokenized assets are only in the billions of dollars, compared with the trillions that sit offchain in TradFi. Still early, but everyone believes that blockchains will be the rails of finance.
The convergence of institutions with DeFi
A question that kept coming up: what do institutions need to see before they touch DeFi?
Today’s blocker isn’t the lack of benefits, but the risk of being on-chain, more specifically counterparty risk. The amount of exploits, whether human or code related failure, makes it hard for institutions with real size to feel comfortable enough to interact.
Impacting their assessment?
Track records across multiple cycles with no hacks at scale
The availability of secure custody solutions at their scale
Infrastructure partners who run their operations transparently and securely.
We see similar barriers to adoption among individual retail users. Many individuals still trust institutions more than they trust code. The most likely future version with mass adoption would be a world where trusted institutions build on top of DeFi in the backend while users interact with an already trusted frontend. Never needing to know what’s underneath. DeFi becomes the rails, not the product.
On-chain finance backed by institutional trust and compliance. They also noted that “crypto” as a word is tainted among institutions after past cycles, but founders who focus on solving real problems will still do well.
Institutional flows: Crypto is now a tool for allocators
CME Group, Coinbase Institutional and Invesco spoke on flows. New buyers are in, and they behave differently compared to holders of past cycles.
Active hedge funds used crypto as a rotation out of AI. Their activity has moved from arbitrage and basis trades toward longer-term positions.
Crypto-related CME volumes spiked after spot ETFs launched, and a global buyer group is emerging for tokenized assets. Traditional institutions still favor traditional vehicles.
HNWIs and large institutions tend to buy dips, which creates a softer price floor. Options activity for traditional strategies is dampening volatility.
An institutional summer was happening during the crypto winter. In the last 18 months, US banks went from not supporting crypto assets, to allowing them if clients asked, to actively recommending them via ETFs, with Morgan Stanley as the example. Legacy incumbents will keep defending market share through regulatory moats and by blocking innovators, but those moats won’t hold forever. Incumbents that recognize the power of the technology, keep up, and adapt their infrastructure and offerings will be the big winners of the future.
Institutional interest has moved past crypto as just an investment asset. Many are building internal capabilities to manage and integrate the assets and technology, and care about how the infrastructure affects their own products.
Cypto has pushed TradFi and markets to change more than people recognize. And as more TradFi explores crypto, the more we will see complex offerings around crypto emerge and global access to opportunities become normal.
AI x crypto: The market hasn’t priced it in
Agentic trading and payments are emerging, partnering to increase yield and opportunities for end users. The current challenge for platforms is mainstream expansion. AI lets retail process far more information, make faster decisions and even build their own infrastructure for managing money.
Capital, however, has not yet followed. Frontier capital is flowing into space, robotics and AI, not crypto. Investors decided early that crypto is not a benefactor of AI, the same way it treated software companies. At the extremes of every technology cycle, markets overreact and we’re currently witnessing a swing back.
AI has moved from capex build-out, to models, to execution, and the two technological cycles (AI and crypto) will intertwine from here. The more of the world goes digital, and the more sophisticated agents get, the more crypto will be used. However, much of AI’s benefit to crypto, and how integral it will be, is not yet priced in. Compute markets running on crypto were named as a likely theme within the year.
Regarding where to position, it’s the executional capabilities of the team that matters more than ideas. The areas named:
DePIN: networks that execute well against AI bottlenecks, namely data, energy and distributed compute for inference.
Identity: proof of humans against the ever increasing world of agents.
Payments: crypto as the way to pay for inference.
Security: Attackers are moving faster than the defenders
Defense will always have humans in the loop, while attackers can run agents nonstop. AI helps build better defenses and algorithms, but the gap between how active attack and defense can be is a key consideration for security.
One view is that we are nearing the end of smart contract hacks, because anything hackable will be hacked soon and future contracts will be AI-tested and secured before launch. The counter is that there is no way to build a 100% secure system. Firms like Pantera and Chainalysis, both on opposite sides of that debate, still agreed the largest vector is human failure and not code.
The proposed defense is offense. You can’t assume humans can be trained to spot scams, however, you can actively fight back against hackers. One mechanism Chainalysis has explored is building victim-like agents that collect data from hackers and scammers at scale, and use it to build preventative measures. Formal verification is also expected to grow.
The quantum threat was another big topic. The concern was post-quantum security, especially for systems built on elliptic curve cryptography, which includes Bitcoin. AI accelerates quantum along with every other trend, and the advice was to assume things move faster than expected. Teams that understand that and adjust will be the ones that do well.
Privacy is the other half of that layer. Interest in privacy projects was high, with Zcash and Near mentioned most often. Quantum threatens the base cryptography, and privacy projects depend on advanced cryptography to give institutions confidentiality they can use without breaking compliance.
Regulation: Speed bump, not a block
CLARITY did not become law. The markets digested the news quickly and moved on. The real cost of the entire lengthy process was uncertainty. Builders and institutions need regulatory clarity, and while passage would likely have accelerated global legislation around crypto, the certainty that the act is not passing is clarity in itself.
With Agencies filling the gap with clearer frameworks, we see the US environment toward crypto change completely, from debanking crypto teams to having supportive, positive frameworks. It remains a pro-innovation environment, and sentiment stays very optimistic.
The contrast between the US, and different regions around the world was another point frequently brought up.
US policy swings with each administration and tends to be binary, either being all-in or unsupportive. Asian governments are more fixed - progress is slower, but consistent and moves forward, albeit step-by-step. That was the view from institutions like Shinhan Asset Management and SBI Holdings.
Regulatory uncertainty has slowed institutional progress everywhere, but meaningful progress is happening across many jurisdictions, and many countries underestimate how much capital could flow into their economies once they open up their markets. Kazakhstan was named as one region trying to establish itself as an innovation hub, though without the scale of the US.
A significant amount of the innovation is happening outside the US, a lot of it in Asia. Exchanges and apps are being forced into build-versus-buy-or-partner decisions as they assemble full product suites while staying regulatory compliant.
Exchanges: The super-app race
Early crypto was about capital appreciation, with liquidity as the focus. Exchanges optimized their initial offerings around that, however, today’s focus is risk management, lending and borrowing, and spending.
The expected winners are vertically integrated, through in-app products and through partners and alternative distribution channels, and many platforms will come and go trying to become the single app for every asset and every person. Crypto exchanges are small next to their TradFi counterparts, so the opportunity successful ones could capture is massive. We see incumbents such as OKX raising fresh rounds to fund their next phase of growth.
Individuals need strong all-in-one platforms, while institutions need full-stack prime brokers. Liquidity is fragmented today across equities, crypto, perps, spot and options on separate platforms, which panelists expect to persist mid-term before consolidation occurs.
Neobanks and stablecoins: Localization is key
Ether.fi, Plasma and Rain spoke on neobanks. A crypto neobank runs a more efficient stack than a bank, with lower overhead and higher profitability. That allows lower take rates and returns more value to the user.
The unit economics are what make it work. Multiple revenue streams (swaps, spend, vaults) fund the cashback and yield, and teams like Ether.fi have been profitable since day one. Going hard early and funding a growth blitz is viable, but the business still needs a strong cash-flow model. The teams that fail often go too wide, too fast, without a targeted go-to-market or a real understanding of their customers.
Growth is not isolated to the US. LATAM, Europe and Southeast Asia are powering a bulk of it. The emerging pattern shows regions with strong native demand, either high-spend nations or those with poor infrastructure, and wherever friction around money is greatest.
From a macro landscape, we see de-dollarization of nation states and corporations occurring as US bonds sell off. While re-dollarization is happening among individuals through stablecoins.
Views are split on non-USD stablecoins. One side believes that normal users want local currency day-to-day; you can’t compete with existing fintechs without it, and it removes FX cost. Another view was that people want access to the USD, so it stays dominant. The middle ground was that winners will be versatile across currencies.
The moat for neobanks is a combination of regulatory, distribution and partnerships. Expect regional winners, as we see in fintech. Everyone is still tiny, and the only way to do well is a strong local offering. Successful teams will pick a handful of markets and specialize.
On agentic payments, neobanks are expected to ship with MCP by default so they can interact with agents. Giving agents spending power is the easy part. The hard part is working out how users actually want to use their agents and scoping the payment framework. Finance is personal and most of the world still uses physical banks, so this will take a while.
Ending on one final big prediction heard during the conference. Dan Tapiero of 50T Funds predicted that BTC will become the focus of TOKEN2049 next year as it hits $250K.
Thank you for taking the time to review this report. This document brings together the conversations, key moments and emerging trends shaping the industry. It is our intention for it to serve as a resource for those who could not attend and a refresher for those who did.
We hope it report offers a thorough overview, sparks further discussion, and deepens your understanding of the topics covered.
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