Digital assets have wide range of benefits and harmonising regulations is key to wider adoption

Regulators need to play an important role in implementing measures to shield consumers from market manipulation, fraud and other risks associated with digital assets

- GOH YU MIN

Tokenised digital assets and money can help to make banking more efficient, but more will need to be done to clarify regulations to create a robust ecosystem around such assets.

While there have been numerous trials, UOB Head of Blockchain and Digital Assets Goh Yu Min anticipates that broader adoption will only pick up after the next three years, starting with more developed markets like Singapore.

"This will happen when blockchain transitions into mainstream use for institutions and consumers and reach an inflection point for widespread usage," he said.

He observed that regulators globally have been refining their frameworks to enhance trust and interoperability in blockchain systems.

"This fosters confidence among mainstream financial institutions to integrate blockchain solutions. Increasingly, companies are incorporating blockchain into their core systems, transitioning from pilot phases to commercial readiness," he said.

GLOBAL EXPERIMENTATION IN DIGITAL ASSETS HAS PICKED UP PACE

For instance, he noted that China is among the leaders, if not the leader, in CBDC development with extensive trials of the digital yuan, although widespread use is still evolving.

Meanwhile, USD-pegged stablecoins such as Tether and the USD Coin appear to be gaining traction among investors, although everyday transaction use is still limited.

Several European Union countries are also exploring CBDC development as digital asset use grows in sectors such as real estate and securities.

US-based think-tank Atlantic Council has published research showing that a total of 134 countries representing 98 per cent of the global economy are now exploring digital versions of their currencies.

Almost half of these countries are at an advanced stage of releasing such currencies, with pioneers such as China, the Bahamas and Nigeria starting to see usage rise.