Capital markets are approaching a tipping point. Whether through stablecoins in the US or tokenised assets in Europe, the infrastructure for digital finance is being built — and firms that wait risk being left out of the conversation.
“We’re creating the system now,” said Chris Woolard, partner at EY and former chair of the UK’s Financial Conduct Authority. “If you’re not part of it, you may not get a say.”
Speaking to Capital Pioneer at Sibos 2025 in Frankfurt in October, Woolard laid out the strategic, regulatory and operational shifts reshaping the sector and why financial institutions must engage now to remain relevant.
“We’re seeing activity across the spectrum,” he explained. “From crypto proper — Bitcoin and similar assets — through stablecoins, tokenised deposits, tokenised equities and central bank digital currencies. Each has its own regulatory and operational implications.”
To make sense of the landscape, Woolard suggests thinking in blocks.
“You’ve got crypto assets at one end, then stablecoins pegged to fiat, followed by conventional financial instruments like bank deposits or mortgages in digital form,” he said. “Then tokenised equity, and finally central bank digital currencies (CBDCs). That’s the spectrum we’re working with.”
But the regulatory response is far from uniform.
“Europe’s MiCA and the US Genius Act are heading in different directions, but both aim to create a framework,” he said. “Japan is on its way, Hong Kong has a quasi-framework, and the UK and Singapore are nudging the market while trying to make sense of it.”
Woolard is frank about MiCA’s limitations – “It’s clunky and will need to evolve” – but noted it was the first serious attempt to draw a perimeter around the space.
In the UK, the Bank of England’s caution is rooted in monetary policy. “They’re sceptical about stablecoins and CBDCs, but they’re pushing hard on tokenised deposits — trying to capture digital benefits without destabilising the system,” said Woolard.
“Stablecoins carry similar risks to money market funds, as in they can break the buck. And CBDCs raise questions about removing benefits from the commercial banking system.”
Yet, this divergence in approach raises questions about interoperability.
“We’ve always had regulatory fragmentation, but geopolitics is deepening it,” Woolard warned. “The US is pursuing its own path, Europe is doing the same, and others such as India and Japan are working out what fits domestically. That’s not going to reconcile easily.”
He sees two scenarios emerging: “Either we get modified adoption tailored to each jurisdiction, or we end up in a competition between standards — like VHS versus Betamax. The better tech doesn’t always win.”
For Woolard, the wholesale space is where tokenisation could be transformative. “Retail applications like house buying or delivery fulfilment are interesting, but the big money is in wholesale. Trillions in liquidity are locked up. If you want global growth, you need to get money moving — not parked overnight in vaults.”
He pointed to clearing and settlement as areas ripe for innovation, with “a huge amount of capital tied up in collateral pools and overnight safekeeping”.
“If tokenisation can unlock that, it’s a game changer.”
Yet readiness across the industry is uneven. “We’ve seen all the major players getting themselves ready — custody, settlement, bridging digital and fiat. But the buy side is lagging. Asset managers are still waiting to be told what to do. The sell side is evolving, but they risk being left out.”
Woolard believes the tipping point is near with European and US markets “finally coming of age”.
Woolard is also clear that experimentation is already underway. “Some large global groups are trialling internal coins — not for public use, but to learn. That’s helping them understand how business models might evolve, especially cross-border.”
Yet, legal clarity remains a sticking point as the legal systems in some jurisdictions don’t yet recognise digital asset ownership properly, which creates friction and risk appetite issues.
Asked how firms should approach the transition, Woolard is pragmatic.
“There’s no one-size-fits-all. Some firms have been experimenting for years. Others are just starting to think strategically. Most are in the evolutionary camp, but a few are genuinely exploring revolutionary change.”
He also sees promise in collaborative infrastructure. “In the UK, we’re working with the largest banks and UK Finance on building a tokenised deposit network — the regulated liabilities network. That could unlock huge pools of assets and enable new forms of settlement and securitisation.”
Ultimately, Woolard urged firms to engage — not wait. “This isn’t about hype. It’s about readiness. The system is being built. If you’re not involved now, you may not shape what comes next.”
Chris Woolard CBE is EY’s Global Lead for Financial Services Regulation and a former Chair of the UK Financial Conduct Authority. He was speaking to Capital Pioneer at Sibos 2025 in Frankfurt.
