A Shift from Hype to Structure
In 2025, the crypto ecosystem has entered a new phase. The early promises of decentralization and permission less finance have matured into more structured objectives: interoperability, regulatory clarity, and institutional-grade infrastructure.
One of the clearest manifestations of this shift is the rising strategic relevance of stablecoins and their integration with the tokenization of real-worldassets (RWAs). As these layers evolve, the distinction and coordination between on-chain and off-chain capital has become a central architectural concern.
The Stablecoin Market: Dormant Capital, Exponential Potential
Stablecoins—digital assets pegged to fiat currencies—now represent the most widely used form of crypto liquidity. According to recent data, their market supply has grown over 58% in the last year, and may surpass $2 trillion by 2030.
Yet, this growing market masks a paradox. Over $7 billion in stablecoins remain idle in Ethereum wallets, according to Theo, a blockchain infrastructure firm. If deployed into U.S. Treasury-backed instruments or tokenized fixed income products, these assets could generate more than $3 billion in annual yields—capital currently being wasted.
This"dormant liquidity" illustrates a deeper structural issue: the lackof regulated and sustainable channels to connect crypto-native capital with traditional financial yield instruments.
Tokenization and the Promise of Real-World Yield
Tokenization refers to the process of representing real-world assets (bonds, equities,commodities, real estate, etc.) on a blockchain. This allows for programmable ownership, fractionalization, instant settlement, and global accessibility.
However,tokenization requires legal, technical, and operational bridges betweentwo financial universes:
- On-chain: Blockchain-native capital and infrastructure.
- Off-chain: Regulated capital markets, banks, custodians, and registrars.
For tokenization to scale, these two layers must interact in a compliant, auditable, and enforceable manner. This is where stablecoins serve a dual function—not only as mediums of exchange, but increasingly as liquidity bridges between digital and traditional assets.
The On-Chain / Off-Chain Architecture: Separation by Design
A growing number of legal and technical frameworks now advocate a layered architecture for financial products involving crypto:
This separation allows systems to be designed in a way that ensures:
- Legal enforceability and regulatory compliance.
- Technical scalability and cost-efficiency.
- Clear audit trails and legal segregation of roles and functions.
The user may interact off-chain via a web interface or service provider, while the core transactional logic executes on-chain, triggering issuance,transfer, or redemption of tokenized assets under predetermined conditions.
The Legal Challenge: Bridging Both Worlds
From a legal perspective, the interaction between on-chain code and off-chain legal obligations remains one of the most complex and evolving areas. Key legal issues include:
- Enforceability of smart contracts: Do they meet contractual validity under national law?
- Custody and beneficial ownership: How is ownership of tokenized assets recognized in traditional jurisdictions?
- Regulatory perimeter: Does a service qualify as an e-money issuer, securities intermediary, or payment institution?
A growing trend is the use of hybrid legal structures, where tokenization platforms rely on SPVs, trusts, or custodial agents to anchor off-chain rights, while enabling digital representation and control through on-chain instruments.
The Institutional Path Forward
Forstable coins and tokenized finance to fulfill their promise, several priorities must align:
- On-chain yield mechanisms must become sustainable and legally sound (e.g. tokenized T-Bills).
- Interoperability frameworks must support seamless flow of capital between custodians, blockchains, and financial institutions.
- Legal harmonization must progress to enable recognition of tokenized instruments across jurisdictions.
Projects like Theo, among others, are actively building middleware to bridge institutional capital markets with on-chain liquidity, aiming to replicate the legal certainty of traditional finance in a decentralized setting.
Conclusion: A New Financial Grammar
We are witnessing the early stages of a structural realignment: from retail speculation to programmable capital flows that respect both legal and technical constraints.
Stablecoins are no longer just instruments of volatility avoidance. They are becoming the foundation for interoperable, programmable, and scalable financial systems, where the on-chain/off-chain separation is not a barrier—but a design principle.
Further information
For any questions on the topics raised in this alert, please contact José María Morales Oliveros
