Hub for Blockchain Capital
Hub for Blockchain Capital
The crypto world in 2025: stablecoins everywhere, institutions piling in, and regulators… well, regulators are still trying to figure it all out. The TRM Labs report paints a picture of accelerating adoption, fueled by regulatory clarity, especially around stablecoins. But is it really that simple? Are we looking at a Trump-fueled boom, or is this just a house of cards waiting to collapse?
Seventy percent of jurisdictions progressed stablecoin regulation in 2025, according to TRM. The US passed the GENIUS Act, the EU rolled out MiCA, and Hong Kong, Japan, Singapore, and the UAE all made moves. The narrative is clear: stablecoins are becoming respectable. But let’s dig a little deeper.
The report claims stablecoins are the "entry point for institutional adoption." But what kind of adoption are we talking about? Are pension funds loading up on USDT, or are institutions using stablecoins for faster settlements and cross-border payments? The devil, as always, is in the details, and TRM’s report doesn’t offer much granularity here. For example, Tether's USDT keeps getting downgraded for reserve quality. S&P pointed to weaker reserve quality, shrinking cash-equivalent holdings and rising exposure to secured loans and Bitcoin as reasons for the downgrade.
And that's the part I find genuinely puzzling. If stablecoins are becoming so mainstream, why are regulators still so focused on the issuance of these assets, and not the actual utility of them? It feels like everyone is trying to build a regulatory box around something they don't fully understand.
The report states that about 80% of reviewed jurisdictions saw financial institutions announce digital asset initiatives in 2025. That sounds impressive, right? But "announcing an initiative" and "actually deploying capital" are two very different things. We need to see concrete numbers: How much capital are these institutions allocating to crypto? What percentage of their overall portfolios does that represent?
Texas became the first US state to publicly invest in Bitcoin, according to Bitfinex analysts. That is indeed, a symbolic move. But how much did they invest? Was it $100 million? 1 billion? The report doesn't say. Without those numbers, the "institutional adoption" narrative feels more like marketing than reality. What is clear is that the old Basel Committee rules would have required full capital deductions for most crypto assets.
And this is where the Trump administration comes in. The report mentions the US leading an "acceleration in crypto policymaking and friendlier regulatory attitudes." But is this a sustainable trend, or just a temporary blip? Policy can change with administrations, and the long-term outlook for crypto regulation in the US remains uncertain. It depends on who's in power, doesn't it? Crypto Market Enters a Stabilisation Phase, Experts Say
TRM’s analysis found that virtual asset service providers (VASPs), which are the most widely regulated segment of the crypto ecosystem, have significantly lower rates of illicit activity than the overall ecosystem. This is presented as a clear win for regulation. But correlation doesn't equal causation. Are regulated VASPs simply attracting a different type of user, one who is less likely to engage in illicit activity? Or is regulation actually deterring bad actors?
The report also mentions North Korea's record-breaking hack on Bybit, where attackers laundered proceeds through unlicensed OTC brokers, cross-chain bridges, and decentralized exchanges. This highlights a crucial point: regulation is only effective if it's comprehensive and consistently enforced. Gaps in the system will always be exploited.
The TRM Labs report is a valuable snapshot of the crypto landscape in 2025. But it's crucial to approach these findings with a healthy dose of skepticism. While there's evidence of growing adoption and increasing regulatory clarity, the numbers often lack the granularity needed to draw firm conclusions. The Trump administration may have given crypto a boost, but the long-term outlook remains uncertain. As always, investors need to do their own due diligence and look beyond the headlines.