Public blockchains are moving toward practical use in regulated finance, supported by leading global institutions. Although early expectations assumed a longer development horizon, advancements in clearing and settlement integration suggest that blockchain-based systems are becoming increasingly relevant to the operational foundations of investment management.
Just as SWIFT reshaped global transaction processing in the 1970s, blockchain-based settlement chain may play a similar role for tokenized financial instruments. For institutional allocators, chief investment officers, and risk professionals, these developments signal an inflection point in global banking infrastructure, even as important adoption challenges remain.
From Pilot to Proof
A key distinction in 2025 is the level of engagement from major financial institutions. Large organizations are collaborating on production-grade blockchain systems rather than conducting isolated pilots. This transition began in November 2023, when JPMorgan and the Monetary Authority of Singapore (MAS) executed the first binding interbank payment on a public blockchain, settling tokenized Singapore dollars on the Polygon network (a public, Ethereum-compatible blockchain optimized for low-cost, high-speed transactions).
The transaction demonstrated that public blockchains can support transparent, final settlement for regulated payments which is an important milestone beyond early experimentation.
MAS extended this work through Project BLOOM, an initiative to develop a scalable, multi-institution clearing framework for tokenized liabilities, including commercial bank deposits and regulated stablecoins.
Designed to operate across both public and permissioned blockchains, BLOOM aims to improve interoperability and support coordinated issuance, clearing, and settlement. These developments suggest that core banking and investment systems will, over time, require the capability to interact with programmable, continuously available, and transparent ledgers as blockchain-based settlement gains traction.
This blog explores three critical dimensions of this execution: emerging infrastructure, cross-border liquidity, and real-world adoption.
Deterministic Settlement and Emerging Infrastructure
The blockchain model introduces deterministic or “atomic” settlement, where payment and receipt occur simultaneously without intermediaries. This structure can reduce counterparty risk, streamline reconciliation processes, and shorten settlement cycles. To support these outcomes, infrastructure enhancements are taking shape, including:
- Unified token standards: improving interoperability and reducing operational complexity.
- Smart contract–based settlement: allowing regulatory requirements to be incorporated directly into transaction logic.
- Agentic payments: triggered automatically based on predefined conditions or real-world data inputs.
Together, these features illustrate how tokenized settlement frameworks may modernize aspects of interbank payments while preserving the regulatory oversight and operational discipline required in traditional finance.
Cross-Border Liquidity: Toward Continuous, Real-Time Capital Movement
One of the most practical applications of blockchain-based settlement is the ability to move capital across jurisdictions in real time. Traditional cross-border transactions often involve multiple intermediaries, foreign exchange timing mismatches, and non-overlapping settlement windows, all of which contribute to liquidity fragmentation and increase operational costs.
Potential benefits include:
- T+0 settlement: reducing settlement risk across time zones and improving cash availability.
- On-demand FX: enhancing execution certainty and automating aspects of currency management.
- Reduced capital requirements: including lower reliance on Nostro/Vostro accounts.
However, challenges remain. These include data-input reliability (oracle risk), divergent regulatory frameworks across jurisdictions, and the need to embed compliance controls directly into automated workflows. Despite these considerations, the potential efficiency gains for fund managers and corporate treasuries, such as faster settlement, reduced liquidity buffers, and more automated operations, are meaningful.
Real-World Adoption: Implications for Fiduciaries
As blockchain-based settlement progresses from piloting to early adoption, fiduciaries and investment professionals will need to prepare for hybrid operating environments that incorporate both traditional and on-chain processes.
Practical steps include:
- Assessing readiness: including custodians, fund administrators, and treasury partners.
- Building expertise: in smart contract risk, data governance, and operational controls.
- Equipping compliance/operations: manage workflows that interact with programmable settlement rails.
While the transition will be gradual, these developments signal a modernizing shift in how financial institutions coordinate payments, data, and liquidity across markets.
Looking Ahead: A Tokenized Settlement Environment
For investment professionals, passive monitoring of blockchain developments is no longer sufficient. Firms will need to develop literacy around tokenized cash instruments, evaluate vendor readiness, and consider how blockchain-based settlement may affect operational efficiency, liquidity management, and risk oversight.
As market infrastructure evolves, so must the fiduciary approach. Blockchain is no longer simply a ledger; it is emerging as part of the settlement process that may support the next generation of financial operations.
