At the recent Circle Forum in Duabi, our CEO and Founder, Usman Ahmad, joined industry leaders to discuss one of the most pressing questions in digital finance – are institutions truly engaging with digital assets and how do we scale their participation? The panel, “The Institutional Wave: Accelerating Capital Markets Adoption in Digital Assets,” explored the global trends reshaping market structure, unpacked regional models of adoption and outlined what is required to unlock the next phase of institutional growth.

From our perspective at Zodia Markets, institutional adoption is no longer a case of ‘if’ or ‘when’ – it is happening. We are witnessing meaningful momentum driven by shifts in policy, infrastructure and client demand. While the full potential of this evolution is still ahead, the trajectory is clear and we’re excited about leading this transformation through product innovation, regulatory readiness and strategic initiatives such as our involvement in the design of the Circle Payments Network.

How is regulatory clarity accelerating institutional adoption of digital assets?

The institutional journey into digital assets has long been anticipated. Today, however, the environment is fundamentally different. In the United States, regulatory developments are starting to bring greater clarity and confidence to market participants. For institutions operating globally, developments in Washington remain highly consequential. In any market not subject to US sanctions, developments in DC are critical – if the US sneezes, the world catches a cold.

Milestones, such as the approval of a spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC) in Jan 2024, further demonstrate that institutional entry is real and has been progressing for some time. That said, the challenge now lies in achieving institutional scale, infrastructure maturity and regulatory certainty. Something Zodia Markets is actively influencing.

How are regional markets using stablecoins to solve cross-border payment challenges?

Institutional adoption is not progressing at the same pace across regions or even within institutions. As we’ve observed in traditional finance, transaction banking, custody, treasury and innovation teams often take divergent approaches to engagement with digital assets.

Joining Usman on the panel was Nkahiseng Oratile Ralepeli VP of Product: Digital Assets at ABSA Group who reflected that in high-growth regions such as Africa, the need for cross-border payment innovation is especially pressing where traditional methods are often slow, costly and fragmented. According to the World Bank, Sub-Saharan Africa remains the most expensive region to send money, with remittance costs averaging 8.37% in Q2 2024. Stablecoins offer a compelling alternative by enabling instant settlement, low fees and transparent transactions. In 2024, stablecoin transaction volumes in Africa reached approximately $50 billion and were driven by real-world use cases including remittances, SME payments, treasury management and freelance salaries.

The adoption of stablecoins is not just a future prospect, it’s happening and local banks face increasing pressure from stablecoin-native providers who are able to facilitate the seamless movement between local currencies and digital dollars. This growing adoption underscores the competitive necessity for banks to innovate and integrate stablecoin solutions to meet the demand for efficient, low-cost, 24/7 cross-border payment options.

At the same time, banks are seeing a growing number of counterparties whose balance sheets are not primarily fiat-based. In South Africa alone, crypto access is forecasted to grow from 9% today to 36% by 2030. This shift is challenging traditional credit models and underscores the need for new frameworks and tools to assess and service these clients effectively.

Why are stablecoins emerging as a priority use case for institutional finance?

For true institutional adoption to accelerate, clarity in regulation must match the pace of innovation. The emergence of dedicated stablecoin legislation in the US is an encouraging step in the right direction. The previous regime’s approach of regulation by enforcement was neither sustainable nor conducive to responsible growth. Institutions require clearly defined rules of the road – conditions that allow them to allocate capital, invest in infrastructure and develop product strategies with confidence.

This clarity is enabling institutions to act and stablecoins, with their clear utility and regulatory focus, are emerging as one of the most impactful early use cases. According to Finery Markets’ 2024 OTC Market Review, stablecoin transactions experienced a 147% year-on-year growth in 2024. In addition, a joint report between Zodia Markets and Standard Chartered predicted that the implementation of relevant U.S. regulation would see stablecoin transaction volumes grow from 1% of US M2 transactions to 10%.

Despite this rapid growth, stablecoin transaction volumes still account for only a small share of their potential. The traditional global FX market processes more than $7.5 trillion in transactions each day, underscoring the transformative potential of blockchain-based financial infrastructure in redefining global value exchange.

At Zodia Markets, the business is in position to enable this shift. With bank-grade infrastructure, a deep understanding of institutional requirements and strategic partnerships with leaders like Circle, we are helping to lay the groundwork for a more efficient, interconnected financial system.

What’s needed to scale the institutional digital finance infrastructure?

Institutional adoption of digital assets is advancing with increasing confidence and clarity. However, real scale will come through collaboration, standardisation and the integration of a new financial infrastructure that complements legacy systems underpinning global markets. An infrastructure that removes friction, reduces costs, unlocks capital faster and makes the movement of value across the world as seamless as email.

At Zodia Markets, we are proud to be part of this evolution. We are not simply responding to change – we are helping to shape it. Through innovation, regulatory alignment and trusted partnerships, we are building the infrastructure for the next generation of digital finance.

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