The digital assets Cold War
10 Dec 2025
What was once imagined as a single global system is splintering into regional ecosystems. From Singapore’s pilots to Brussels’ rulemaking and Washington’s regulatory rethink, the digital-assets landscape has entered a three-way contest of ambition, ideology and market design
Image: tasphong/stock.adobe.com
At 08:00 SGT in Singapore, traders are already experimenting with tokenised funds. In Paris, regulators are reviewing Markets in Crypto-Assets (MiCA) implementation plans. And in New York, financial firms are waiting for the next round of federal guidance to determine whether their blockchain projects can finally scale.
Three markets, three worldviews — and one technology that refuses to sit neatly inside any single jurisdiction.
Digital assets were once spoken about as a global phenomenon. A borderless, universal market infrastructure without the drag of geography.
But as institutional adoption begins in earnest, the opposite seems to be happening: the world of digital assets is fragmenting.
Asia is building at speed. Europe is building the rulebook. The US is building cautiously — but on the world’s largest capital base.
The result is a geopolitical and regulatory divergence that is shaping the next era of market structure: a digital assets Cold War.
Asia: The sprinter
Asia’s story is not simply one of speed — it is one of alignment, ambition, and population-scale demand.
“Asia is very much part of the global digital-asset surge,” says Boon Hiong Chan, Deutsche Bank’s head of Securities Market and Technology Advocacy, APAC. He points to mobile-first populations, digitally-native users, and large under-banked segments, all of which create “fertile demand for alternative financial infrastructure”.
Countries such as Singapore, Hong Kong, and Japan are not waiting for consensus. They are moving forward with sandboxes, pilots, and licensing regimes that pull private-sector activity into regulated domains.
Hong Kong’s success in tokenising a China asset management fund, Standard Chartered notes, “is now a reality, not just a pilot project” — a sign that institutional appetite in the region is maturing rapidly.
Chan emphasises that Asia’s path is not a copy-paste of Western models. “Asian markets should assess their requirements, not simply replicate deep-capital-market use-cases,” he argues.
Instead, he calls for region-specific solutions — tokenised small and medium-sized enterprise (SME) funding, blockchain-based savings tools, inclusive payment systems that work across fragmented geographies. With the right balance of innovation and regulation, “Asia can become the region where a next wave of digital-asset growth is born”.
A spokesperson from Standard Chartered’s APAC team agrees: Asia’s momentum is powered by a blend of policy ambition, competitive pressure, and real customer demand.
“It is always and above all customer demand that drives the business,” the spokesperson notes. With regulators in Hong Kong and Singapore offering clarity and flexibility, adoption is accelerating.
If Europe designs digital assets on paper, Asia builds them in the market.
Europe: The policymaker
Where Asia prioritises speed, Europe prioritises safety, structure, and legal certainty.
“Europe and Switzerland currently set the pace — not through hype, but through regulation-first design,” says Markus Hammer, chief product officer at BrickMark X. He points to MiCA, the Distributed Ledger Technology (DLT) Pilot Regime, and national legislation such as Germany’s ‘Gesetz über elektronische Wertpapiere’ (eWpG) and Switzerland’s DLT Act as frameworks that allow institutions to operate with confidence.
Europe’s strategy is not subtle: it wants to become the global reference point.
“MiCA provides passportability across 27 markets,” Hammer explains. But he also cautions that innovation is not automatically accelerated by regulation. Tokenised securities remain under full Markets in Financial Instruments Directive (MiFID) supervision — a reminder that, while Europe leads in coherence, it may still lag in speed. A “MiCA II”, he suggests, may be needed to close that gap.
BNP Paribas’ Verena Hess believes Europe is indeed positioning itself as a benchmark: “With MiCA and the DLT Pilot Regime, the EU is the first major jurisdiction to put in place a comprehensive, passportable framework for digital assets.”
An ESMA spokesperson adds institutional weight: “MiCA has been a revolutionary regulation, unique at the global level that aims to support innovation and fair competition while also attempting to protect and guarantee some minimum requirements in the crypto space, in an environment that is highly volatile and fragmented.”
Still, Europe’s clarity comes with a cost — slower execution and less flexibility.
Hammer is direct about the competitive landscape. Switzerland, he argues, has paired bespoke DLT legislation with fully-licensed digital exchanges, creating one of the most advanced environments worldwide for real-world-asset tokenisation. This is a model many firms, including his own, view as the operational blueprint for regulated digital-asset markets.
At the same time, he notes that the United Arab Emirates (UAE) — through Dubai’s VARA regime and Abu Dhabi’s ADGM framework — is emerging as a third major regulatory centre with some of the clearest, most production-ready rules for tokenised instruments.
Europe sets the rules, others are racing to build around them.
The United States: Power without clarity
The US remains the world’s deepest capital market. The question is whether it can maintain influence without regulatory cohesion.
Hammer does not soften his view on the United States’ regulatory maze. He notes that regulatory fragmentation — whether across countries or within a federal system — slows innovation and market adoption, adding that in the US, conflicting interpretations from the US Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and state regulators, create precisely the kind of friction that global institutions prefer to avoid.
This regulatory uncertainty, he argues, remains one of the core reasons issuers and platforms often look to Europe, Switzerland, Singapore, or the UAE when considering where to scale tokenised instruments.
German Soto Sanchez, chief product and strategy officer at Broadridge, adds a structural explanation: unclear jurisdictional lines, overlapping rules, and enforcement-first patterns have created “stop/start cycles” that hinder development. Innovation exists — but clarity does not.
And yet, something has shifted in the last year.
“Recent regulatory developments in the US have helped change perceptions,” says a spokesperson from State Street. From the repeal of Staff Accounting Bulletin No. 121 (SAB 121) to the GENIUS Act and progress on stablecoin regulation, the US is now “pursuing a comprehensive, and in some cases more permissive, regulatory stance.”
A spokesperson from Standard Chartered, however, offers a counterweight: “The US is not losing ground at all to Asia, and even less so to Europe.” In their view, all regions move at their own speed; the US simply innovates differently — often through market behaviour rather than regulatory design.
DTCC’s Nadine Chakar reveals how industry players are responding: by building digital asset capabilities that bridge traditional and blockchain environments. DTCC’s experiments with Euroclear and Clearstream offer “a blueprint for establishing an industry-wide data asset ecosystem,” she explains, focused on standards, controls, and governance for tokenised markets.
The US is not out of the race, it is simply running on a different track.
Fragmentation or convergence?
If digital assets were meant to create a unified global architecture, the industry looks like it now faces the opposite reality: three incompatible regulatory and market design philosophies.
“Across all regions, the next phase of progress will depend on standards,” says Richard Baker, CEO of Tokenovate. Without shared legal, technical and operational frameworks, “digital asset markets cannot scale with confidence or interoperability.”
He cites the UK’s standards-based approach, built on tools like the Common Domain Model, as a blueprint for cross-border harmonisation.
BNP Paribas echoes this: blockchain’s value grows through network effects — but sovereign chains, isolated permissioned platforms and diverging digital-currency models risk breaking that network. Interoperability, taxonomy alignment, anti-money laundering (AML) rules, smart-contract standards: these are now global negotiations, not technical upgrades.
Nadine Chakar from DTCC states: “Furthermore, interoperability is key. It’s critical that various blockchains can communicate not only with each other but with traditional systems too. Interoperability is critical if we are to fully capture the benefits of digital assets technology – including enhancing efficiency, liquidity, and the bottom line.
“We assume there will never be just one blockchain network managing the flow of collateral, or any asset class, for the entire financial industry.
“At DTCC, our guiding principle as we contemplate solutions around tokenisation, for example, is that any token we create should be interoperable across traditional and digital ecosystems, including many blockchain network providers.”
Standard Chartered sees both divergence and convergence unfolding at once. Areas like stablecoins, Central Bank Digital Currencies (CBDCs), and tokenised deposits are splitting regions apart — while customer demand pushes them back together.Digital assets, in other words, will not become one world — they will become several worlds that must still communicate.
The industry response
Custodians and Financial Market Infrastructures (FMIs) are not waiting for political harmony.
State Street is preparing to offer digital asset custody, transfer agency for tokenised assets, and a digital collateral management platform — all designed to operate across multiple regulatory regimes.
“We are committed to ensuring our technology is digitally capable to allow clients to operate in both a traditional and digital finance environment,” the firm says.
Standard Chartered is building identical digital custody capabilities across Luxembourg, Dubai, Hong Kong, and Singapore — each selected for regulatory clarity and client demand.
“Technology is neutral,” says the firm. “Global custodians must adapt systems to different geographical rulebooks.”
DTCC is tackling cross-border collateral mobility, running real-world experiments that move tokenised Treasuries through multiple ecosystems.
Apex highlights shifting generational expectations and 24/7 subscription/redemption models that will force custodians to evolve.
Deutsche Bank’s APAC team warns that Asia must design systems suited to local realities, not Western templates.
Institutions are preparing for a world where digital assets are not an optional add-on — but the new market infrastructure.
Who wins this Cold War?
Every expert who has commented agrees: the future is not winner-takes-all.
“Tomorrow’s leaders will be those already well advanced in their journey,” says Standard Chartered — but each region’s pathway will reflect its own history, regulation and customer demand.
BNP Paribas considers blockchain akin to the early internet: not defined by geography, but shaped by the ability to interoperate across geographies.
DTCC believes scale will come from standards and cross-industry collaboration.
Soto Sanchez argues that leadership depends on balancing regulatory clarity with innovation velocity.
Hammer sees Switzerland, Europe, and the UAE currently setting the regulatory tone.
Chan sees Asia harnessing its demographic and structural strengths to build inclusive finance and tokenised capital formation.
The only consensus is that there is no single path.
Three clocks, one future
As markets open each morning in Singapore, Paris, and New York, the global map of digital assets redraws itself.
Not through a single global system, but through three competing visions. Asia’s speed. Europe’s structure. America’s scale.
Together, they form a fragmented — but increasingly interconnected — future.
The digital-assets Cold War is not about conflict, it is about ambition, and the result may not be a single global market, but a new era where regional identities shape global finance.
The infrastructure is being built. The standards are being negotiated. The race is not to the fastest, nor to the strictest — but to those who can blend innovation, regulation, and geopolitical strategy into a coherent model.
The next chapter of financial history will be written across three continents.
And it has already begun.
Three markets, three worldviews — and one technology that refuses to sit neatly inside any single jurisdiction.
Digital assets were once spoken about as a global phenomenon. A borderless, universal market infrastructure without the drag of geography.
But as institutional adoption begins in earnest, the opposite seems to be happening: the world of digital assets is fragmenting.
Asia is building at speed. Europe is building the rulebook. The US is building cautiously — but on the world’s largest capital base.
The result is a geopolitical and regulatory divergence that is shaping the next era of market structure: a digital assets Cold War.
Asia: The sprinter
Asia’s story is not simply one of speed — it is one of alignment, ambition, and population-scale demand.
“Asia is very much part of the global digital-asset surge,” says Boon Hiong Chan, Deutsche Bank’s head of Securities Market and Technology Advocacy, APAC. He points to mobile-first populations, digitally-native users, and large under-banked segments, all of which create “fertile demand for alternative financial infrastructure”.
Countries such as Singapore, Hong Kong, and Japan are not waiting for consensus. They are moving forward with sandboxes, pilots, and licensing regimes that pull private-sector activity into regulated domains.
Hong Kong’s success in tokenising a China asset management fund, Standard Chartered notes, “is now a reality, not just a pilot project” — a sign that institutional appetite in the region is maturing rapidly.
Chan emphasises that Asia’s path is not a copy-paste of Western models. “Asian markets should assess their requirements, not simply replicate deep-capital-market use-cases,” he argues.
Instead, he calls for region-specific solutions — tokenised small and medium-sized enterprise (SME) funding, blockchain-based savings tools, inclusive payment systems that work across fragmented geographies. With the right balance of innovation and regulation, “Asia can become the region where a next wave of digital-asset growth is born”.
A spokesperson from Standard Chartered’s APAC team agrees: Asia’s momentum is powered by a blend of policy ambition, competitive pressure, and real customer demand.
“It is always and above all customer demand that drives the business,” the spokesperson notes. With regulators in Hong Kong and Singapore offering clarity and flexibility, adoption is accelerating.
If Europe designs digital assets on paper, Asia builds them in the market.
Europe: The policymaker
Where Asia prioritises speed, Europe prioritises safety, structure, and legal certainty.
“Europe and Switzerland currently set the pace — not through hype, but through regulation-first design,” says Markus Hammer, chief product officer at BrickMark X. He points to MiCA, the Distributed Ledger Technology (DLT) Pilot Regime, and national legislation such as Germany’s ‘Gesetz über elektronische Wertpapiere’ (eWpG) and Switzerland’s DLT Act as frameworks that allow institutions to operate with confidence.
Europe’s strategy is not subtle: it wants to become the global reference point.
“MiCA provides passportability across 27 markets,” Hammer explains. But he also cautions that innovation is not automatically accelerated by regulation. Tokenised securities remain under full Markets in Financial Instruments Directive (MiFID) supervision — a reminder that, while Europe leads in coherence, it may still lag in speed. A “MiCA II”, he suggests, may be needed to close that gap.
BNP Paribas’ Verena Hess believes Europe is indeed positioning itself as a benchmark: “With MiCA and the DLT Pilot Regime, the EU is the first major jurisdiction to put in place a comprehensive, passportable framework for digital assets.”
An ESMA spokesperson adds institutional weight: “MiCA has been a revolutionary regulation, unique at the global level that aims to support innovation and fair competition while also attempting to protect and guarantee some minimum requirements in the crypto space, in an environment that is highly volatile and fragmented.”
Still, Europe’s clarity comes with a cost — slower execution and less flexibility.
Hammer is direct about the competitive landscape. Switzerland, he argues, has paired bespoke DLT legislation with fully-licensed digital exchanges, creating one of the most advanced environments worldwide for real-world-asset tokenisation. This is a model many firms, including his own, view as the operational blueprint for regulated digital-asset markets.
At the same time, he notes that the United Arab Emirates (UAE) — through Dubai’s VARA regime and Abu Dhabi’s ADGM framework — is emerging as a third major regulatory centre with some of the clearest, most production-ready rules for tokenised instruments.
Europe sets the rules, others are racing to build around them.
The United States: Power without clarity
The US remains the world’s deepest capital market. The question is whether it can maintain influence without regulatory cohesion.
Hammer does not soften his view on the United States’ regulatory maze. He notes that regulatory fragmentation — whether across countries or within a federal system — slows innovation and market adoption, adding that in the US, conflicting interpretations from the US Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and state regulators, create precisely the kind of friction that global institutions prefer to avoid.
This regulatory uncertainty, he argues, remains one of the core reasons issuers and platforms often look to Europe, Switzerland, Singapore, or the UAE when considering where to scale tokenised instruments.
German Soto Sanchez, chief product and strategy officer at Broadridge, adds a structural explanation: unclear jurisdictional lines, overlapping rules, and enforcement-first patterns have created “stop/start cycles” that hinder development. Innovation exists — but clarity does not.
And yet, something has shifted in the last year.
“Recent regulatory developments in the US have helped change perceptions,” says a spokesperson from State Street. From the repeal of Staff Accounting Bulletin No. 121 (SAB 121) to the GENIUS Act and progress on stablecoin regulation, the US is now “pursuing a comprehensive, and in some cases more permissive, regulatory stance.”
A spokesperson from Standard Chartered, however, offers a counterweight: “The US is not losing ground at all to Asia, and even less so to Europe.” In their view, all regions move at their own speed; the US simply innovates differently — often through market behaviour rather than regulatory design.
DTCC’s Nadine Chakar reveals how industry players are responding: by building digital asset capabilities that bridge traditional and blockchain environments. DTCC’s experiments with Euroclear and Clearstream offer “a blueprint for establishing an industry-wide data asset ecosystem,” she explains, focused on standards, controls, and governance for tokenised markets.
The US is not out of the race, it is simply running on a different track.
Fragmentation or convergence?
If digital assets were meant to create a unified global architecture, the industry looks like it now faces the opposite reality: three incompatible regulatory and market design philosophies.
“Across all regions, the next phase of progress will depend on standards,” says Richard Baker, CEO of Tokenovate. Without shared legal, technical and operational frameworks, “digital asset markets cannot scale with confidence or interoperability.”
He cites the UK’s standards-based approach, built on tools like the Common Domain Model, as a blueprint for cross-border harmonisation.
BNP Paribas echoes this: blockchain’s value grows through network effects — but sovereign chains, isolated permissioned platforms and diverging digital-currency models risk breaking that network. Interoperability, taxonomy alignment, anti-money laundering (AML) rules, smart-contract standards: these are now global negotiations, not technical upgrades.
Nadine Chakar from DTCC states: “Furthermore, interoperability is key. It’s critical that various blockchains can communicate not only with each other but with traditional systems too. Interoperability is critical if we are to fully capture the benefits of digital assets technology – including enhancing efficiency, liquidity, and the bottom line.
“We assume there will never be just one blockchain network managing the flow of collateral, or any asset class, for the entire financial industry.
“At DTCC, our guiding principle as we contemplate solutions around tokenisation, for example, is that any token we create should be interoperable across traditional and digital ecosystems, including many blockchain network providers.”
Standard Chartered sees both divergence and convergence unfolding at once. Areas like stablecoins, Central Bank Digital Currencies (CBDCs), and tokenised deposits are splitting regions apart — while customer demand pushes them back together.Digital assets, in other words, will not become one world — they will become several worlds that must still communicate.
The industry response
Custodians and Financial Market Infrastructures (FMIs) are not waiting for political harmony.
State Street is preparing to offer digital asset custody, transfer agency for tokenised assets, and a digital collateral management platform — all designed to operate across multiple regulatory regimes.
“We are committed to ensuring our technology is digitally capable to allow clients to operate in both a traditional and digital finance environment,” the firm says.
Standard Chartered is building identical digital custody capabilities across Luxembourg, Dubai, Hong Kong, and Singapore — each selected for regulatory clarity and client demand.
“Technology is neutral,” says the firm. “Global custodians must adapt systems to different geographical rulebooks.”
DTCC is tackling cross-border collateral mobility, running real-world experiments that move tokenised Treasuries through multiple ecosystems.
Apex highlights shifting generational expectations and 24/7 subscription/redemption models that will force custodians to evolve.
Deutsche Bank’s APAC team warns that Asia must design systems suited to local realities, not Western templates.
Institutions are preparing for a world where digital assets are not an optional add-on — but the new market infrastructure.
Who wins this Cold War?
Every expert who has commented agrees: the future is not winner-takes-all.
“Tomorrow’s leaders will be those already well advanced in their journey,” says Standard Chartered — but each region’s pathway will reflect its own history, regulation and customer demand.
BNP Paribas considers blockchain akin to the early internet: not defined by geography, but shaped by the ability to interoperate across geographies.
DTCC believes scale will come from standards and cross-industry collaboration.
Soto Sanchez argues that leadership depends on balancing regulatory clarity with innovation velocity.
Hammer sees Switzerland, Europe, and the UAE currently setting the regulatory tone.
Chan sees Asia harnessing its demographic and structural strengths to build inclusive finance and tokenised capital formation.
The only consensus is that there is no single path.
Three clocks, one future
As markets open each morning in Singapore, Paris, and New York, the global map of digital assets redraws itself.
Not through a single global system, but through three competing visions. Asia’s speed. Europe’s structure. America’s scale.
Together, they form a fragmented — but increasingly interconnected — future.
The digital-assets Cold War is not about conflict, it is about ambition, and the result may not be a single global market, but a new era where regional identities shape global finance.
The infrastructure is being built. The standards are being negotiated. The race is not to the fastest, nor to the strictest — but to those who can blend innovation, regulation, and geopolitical strategy into a coherent model.
The next chapter of financial history will be written across three continents.
And it has already begun.
NO FEE, NO RISK
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
