Outlook for Cryptocurrencies in 2025

In 2024, Cryptocurrency Makes a Strong Comeback

Bitcoin hit a new all-time high, soaring past $100,000, and for the first time, it was included in exchange-traded funds (ETFs) issued by major investment firms. The crypto industry has proven its maturity, marked by innovation that makes the technology useful to a broader audience beyond just crypto enthusiasts.

This trend is expected to continue throughout the year, as traditional finance begins applying blockchain—the underlying distributed ledger technology of cryptocurrencies like Bitcoin—to some of the most persistent and complex challenges in the economy. Meanwhile, the U.S. is pursuing a more ambitious agenda, integrating some (but not all) digital assets into the financial mainstream.

At Mastercard, we firmly believe that for blockchain to reach its full potential, security, trust, and usability must be at its core. With these elements in place, fintechs and financial institutions can more effectively leverage blockchain technology and create scalable use cases that benefit millions of people. In fact, many companies are already advancing the tokenization of money and assets on blockchain networks. This trend is driven by a desire to improve efficiency and reduce the costs of everyday transactions—the very transactions that fuel the global economy.

Looking ahead to the remainder of 2025, I anticipate many changes in the industry. While some of these changes will stem from shifts in the regulatory environment, most will be driven by the needs of consumers, businesses, banks, and the broader economy.

Here are four key areas to watch in the coming year:

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01
Stablecoins or Tokenized Deposits? Both Will Find Their Place

According to a 2023 report from the Federal Reserve, U.S. banks hold nearly $18 trillion in commercial bank deposits from individuals and businesses, including checking, savings, and time deposits. These deposits fuel a significant portion of the global economy—funding bank loans and financial services, driving consumer spending, and supporting trade and commerce. Yet innovation is still needed to bring modern fintech capabilities to this form of money.

To that end, banks are experimenting with so-called “tokenized deposits,” which are tokens issued on blockchains that represent deposits on a bank’s own ledger. Banks aim to use these to accelerate settlement times and enable programmable payments—funds that are disbursed only when specific conditions are met.

Meanwhile, stablecoins, which are pegged 1:1 to fiat currencies, have been growing rapidly—not just due to trading activity but also because of their expanding use in remittances and business-to-business payments. At the time of writing, the value of U.S. dollar stablecoins in circulation stands at around $200 billion. While stablecoins require locked-up funds, they can be transferred instantly and support programmable functionality. A clearer regulatory framework will make stablecoins safer and attract more participants and issuers.

I believe we are entering a world where tokenized commercial bank deposits and stablecoins coexist. Transactions such as tokenized asset purchases may start with tokenized money from a bank account and be settled using stablecoins.

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02
Clearer Rules Give Banks and Institutions the Green Light to Adopt Digital Assets

With the inauguration of President Trump, the U.S. reversed its previously critical stance on crypto. Trump vowed to become America’s first “crypto president.” Notably, on his second day in office, the U.S. Securities and Exchange Commission (SEC) formed a cryptocurrency task force led by Commissioner Hester Peirce to establish a regulatory framework. Two days later, the president issued an executive order on digital assets, creating an interagency task force to develop clearer policy proposals and, where needed, advocate for new legislation.

Meanwhile, the European Union's Markets in Crypto-Assets Regulation (MiCA) went fully into effect on December 30, making the EU the first major jurisdiction to establish a comprehensive regulatory framework for crypto. This clarity is helping financial institutions understand how regulators view digital assets and money, and what steps companies must take (such as stablecoin issuance). This has already encouraged more traditional players to get involved. It’s fair to say that by 2025, lawmakers and regulators will provide more clarity—even if not perfect—on digital asset rules. This is less of a prediction and more of a plea: clearer rules around crypto and how banks can engage with public blockchains will encourage more blockchain experimentation, fostering innovation while curbing bad actors.

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03
Central Banks May Shift from Retail to Institutional Digital Currency Issuance

Just a few years ago, many central banks around the world were exploring the feasibility of issuing digital currencies. Now, more are concluding that the private sector has sufficient innovation capacity, and that consumer-facing central bank digital currencies (CBDCs) may not be a top priority. In fact, Trump’s executive order on digital assets includes a ban on developing and issuing CBDCs, citing concerns that they could threaten the stability of the financial system.

I expect that by 2025, more central banks will align with this trend, gradually abandoning retail CBDCs. However, they will likely continue exploring institutional-focused digital assets—so-called “wholesale” CBDCs. These could significantly improve institutional settlement capabilities and facilitate faster cross-border capital flows.

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04
Interoperability, Standards, and Trust Will Be More Important Than Ever

Today, the crypto industry has a much stronger foundation. Bad actors have been largely pushed out (or have failed spectacularly). The easier access to digital assets is attracting everyday investors, in turn drawing interest from traditionally risk-averse institutions like mutual fund companies. These shifts reinforce the importance of trust, standards, and seamless connectivity with the broader financial system, where the vast majority of monetary value still resides.

That’s why Mastercard’s Multi-Token Network (MTN) is gaining momentum. The MTN makes digital asset transactions more secure, scalable, and interoperable. For example, MTN completed its first real-time test last year in collaboration with Standard Chartered Bank and is also working with Kinexys, a unit of JPMorgan.

Reliable and secure blockchain technology has the potential to drive innovation in both crypto and traditional finance. In 2025, blockchain is poised to integrate more deeply into banking and financial services, enabling faster transactions, greater transparency, new functionalities, and broader innovation.