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After covering digital asset regulation and taxation since 2017, I never expected to write this: 2025 proved a breakout year for tokenization across the U.S. financial system and digital assets broadly.
Summary
– The U.S. GENIUS Act created a regulated framework for stablecoins, requiring 100% reserve backing with liquid assets and monthly public reserve disclosures. Major U.S. firms and global banks accelerated issuance; countries from India to the UAE advanced sovereign or regulated stablecoin models.
– Global AML standards (FATF), U.S. BSA/FinCEN rules, the OECD’s CARF tax reporting (data exchanges starting 2027–28), and new U.S. broker disclosure rules expanded oversight. But uneven implementation and unilateral digital taxes produced regulatory and tax fragmentation.
– Divergent AML, tax, and monetary policy priorities prevent a single worldwide digital payment system. Nations resist ceding financial sovereignty even as tokenization progresses via national, bilateral, and regional initiatives.
U.S. stablecoin regulation and market response
The GENIUS Act set a U.S. federal framework for stablecoins: full reserve backing in liquid assets plus monthly public disclosures. That clarity catalyzed adoption. One survey reported 41% of organizations using stablecoins saw cost savings of 10% or more, largely in cross-border payments.
Major U.S. firms launched or expanded stablecoin activity. PayPal’s PYUSD expanded availability, and other corporate issuers entered the field. World Liberty Financial issued USD1, a Treasury-backed dollar stablecoin. Corporate interest from retailers and cloud platforms reportedly grew as lawmakers considered private-issue frameworks.
Global banks and cross-border projects
Groups of large banks announced stablecoin plans. In the U.S., a consortium including Bank of America, Goldman Sachs, Citi, and others explored issuance; a separate European group featured ING, Barclays, and Santander. Japan’s top three banks — MUFG, SMFG, and Mizuho — planned a joint stablecoin. Sony Bank also prepared a retail-facing issuance.
Regional and national initiatives
China explored “deposit tokens” for compliant domestic alternatives, including partnerships with global banks for cross-border e-commerce. Hong Kong’s BSN and its technical partners advanced support for stablecoins and CBDCs interoperability. Russia was linked to A7A5, a ruble-pegged token. India prepared an Asset Reserve Certificate, a regulated sovereign-backed stablecoin, targeting early 2026. The UAE and Saudi Arabia progressed on a joint ABER project and issued regulated stablecoins as part of digital-economy modernization.
Private-sector platforms and tech firms
Big tech engaged with stablecoins and crypto payments. Google discussed integrating stablecoins into payment systems and accepted crypto payments via Google Cloud pilots. Meta, having shelved Libra/Diem, moved toward integrating third-party stablecoins like USDC and Tether to lower creator-payout costs. Retailers and cloud firms explored customer-focused corporate stablecoins.
Market infrastructure and new issuers
Germany saw AllUnity, a joint venture involving DWS, Flow Traders, and Galaxy, obtain approval and issue a euro-denominated stablecoin. Deutsche Telekom and other European tech firms deepened partnerships with blockchain networks. Global interoperability efforts grew but remained fragmented.
Regulatory, AML, and tax landscape
The Financial Stability Board warned that regulatory implementation across jurisdictions remained uneven, with significant gaps in global stablecoin arrangements. The FATF’s extension of AML/CFT standards to Virtual Asset Service Providers and the Travel Rule required AML controls and originator/beneficiary data sharing; adoption varied by jurisdiction.
Tax transparency advanced through the OECD’s Crypto-Asset Reporting Framework (CARF). Over 60 countries committed to CARF, with the first data exchanges slated for 2027 and more in 2028. CARF requires crypto-asset service providers to collect and report user tax-residence and identification to domestic authorities for cross-border exchange.
U.S. tax and reporting changes
The U.S. enacted centralized-broker disclosure rules requiring brokers to report customer digital-asset transactions to the IRS. For 2025 sales, brokers must file Form 1099-DA reporting gross proceeds. From 2026, brokers must also report adjusted basis in some cases and may face backup-withholding obligations.
A planned rule requiring DeFi platforms to report digital-asset transactions starting in 2027 was nullified by Congress in April 2025, so DeFi platforms are not currently subject to those specific reporting obligations. Individual U.S. taxpayers remain responsible for reporting worldwide crypto income and gains, tracking acquisition dates, cost basis, disposition dates, and fair market values.
U.S. taxpayers holding assets abroad must still comply with FATCA and FBAR reporting thresholds for specified foreign financial assets and aggregate foreign accounts.
Why a single global tokenized payment system is unlikely
A unified global digital payment system would require wide international regulatory and tax alignment — a steep challenge. Primary constraints include:
– AML sovereignty: Countries retain sovereignty over financial systems and currency. While FATF standards have spread, implementation quality and timelines differ.
– Tax complexity: A global payment system would need universal mechanisms for sales tax/VAT, income tax, and capital-gains reporting — areas that hinge on national tax laws and treaty networks. CARF helps but won’t eliminate unilateral digital-tax measures.
– Monetary policy and stability: A universal system could weaken central banks’ control of monetary policy and inflation management. Nations are reluctant to cede financial infrastructure control to supranational bodies.
Conclusion
Tokenization advanced markedly in 2025: stablecoin frameworks, major issuances, bank consortia, sovereign experiments, and expanding tax and AML requirements all moved forward. Yet uneven global implementation, tax fragmentation, and monetary-sovereignty concerns mean progress is incremental. Tokenization is unfolding step-by-step within national and regional frameworks, not as a single, world-spanning payment rail.
