The New Mainstream: Crypto as Financial Plumbing
The narrative for 2025 is one of maturation. The a16z report declares this “the year the world came on-chain”, marking a significant shift from crypto as a niche, speculative asset class to a functional backbone for global finance. This transition is characterized by a powerful feedback loop where rising prices generate interest, which in turn attracts developers who build the products that bring in new users. The most “unmistakeable sign of mainstreaming” is the deep involvement of the world’s largest financial institutions, including BlackRock, Fidelity, JPMorgan, and Visa, who are now actively embedding blockchain technology into their payment systems and investment offerings.
This institutional embrace is supported by a more stable regulatory landscape. The passage of the GENIUS Act, which provides a regulatory framework for stablecoins, and the progression of the CLARITY Act are cited as pivotal developments creating the certainty needed for long-term investment and innovation. The U.S. Securities and Exchange Commission (SEC) has also entered what some analysts call a “plumbing phase,” quietly building an “institutional superhighway” by approving more efficient structures for crypto financial products, such as in-kind creations for crypto Exchange-Traded Products (ETPs). This convergence of institutional participation and regulatory clarity has pushed the total crypto market capitalization to cross the $4 trillion threshold, signaling robust confidence and capital inflow.
The Key Drivers Reshaping Finance
Three interconnected forces are powering this transformation, each reshaping how traders, finance teams, and large funds manage capital and execute strategies.
First, stablecoins have emerged as the market’s main engine. Over the last year, stablecoins processed a staggering $46 trillion in transaction volume, a figure that rivals the throughput of major global payment networks like Visa and is more than double the volume of PayPal. This growth is fueled by their utility in enabling fast, low-cost, and borderless payments. J.P. Morgan research projects the stablecoin market could grow to between $500 and $750 billion in the coming years, underscoring their potential to upgrade legacy financial systems.
Second, institutional access has been revolutionized. The launch of spot Bitcoin and Ethereum Exchange-Traded Products (ETPs) has been a game-changer, providing a familiar and regulated entry point for traditional finance. These products now hold over $175 billion in on-chain assets, bridging the old and new financial worlds. The SEC’s move to permit “in-kind” creations for these ETPs is a monumental shift, making the market more efficient, cost-effective, and structurally similar to traditional commodity ETFs.
Third, the underlying blockchain infrastructure has scaled dramatically. Major blockchain networks can now collectively process 3,400 transactions per second, a more than 100-fold increase from just five years ago, bringing them closer to the capacity of traditional financial networks like the Nasdaq. This has been accompanied by a collapse in transaction costs. The average fee on Ethereum’s Layer-2 networks has dropped from around $24 in 2021 to less than one cent today, making on-chain transactions cheap and practical for a wide range of applications.
The Road Ahead: Implementation and Integration
Looking forward, the focus shifts from adoption to implementation and scaling. The report highlights several key areas where this maturation will continue.
The tokenization of real-world assets (RWAs), such as treasury bonds, real estate, and art, is identified as a major growth frontier. With about $30 billion already tokenized, this trend represents a powerful bridge between crypto and traditional finance, unlocking new liquidity and investment opportunities. Furthermore, the convergence of AI and crypto is creating a new paradigm. Decentralized identity systems like Worldcoin, with over 17 million verified users, offer “proof of personhood” solutions, while new protocol standards are building financial infrastructure for AI agents to conduct micro-transactions and settle payments autonomously.
For corporate treasurers and fund managers, this new era means operationalizing on-chain finance. This involves managing larger cash flows in stablecoins, conducting rigorous audits of the smart contracts that hold value, and navigating an evolving compliance landscape. The foundational work of building the financial plumbing is largely complete; the next phase is about building reliable and secure systems on top of it.
