Blockchain adoption is becoming increasingly divided between two connected markets.
Financial institutions are using distributed ledgers to modernise ownership records, settlement and tokenised assets. BNY is introducing blockchain-based transfer-agency capabilities, while Circle has recruited BlackRock, Visa, Mastercard and other major financial companies to validate its forthcoming Arc network.
At the consumer level, wallets such as Noxcat are attempting to make payments, digital assets and decentralised applications accessible through a single interface. Meanwhile, governments are competing over where that activity should take place. Thailand is using a temporary tax exemption to attract crypto investment into licensed domestic platforms, while Germany is considering ending one of Europe’s most generous long-term crypto tax benefits.
Together, these developments show blockchain becoming more regulated and institutionally useful—but also less uniform in how markets choose to encourage it.
BNY moves fund record-keeping onto blockchain infrastructure
BNY is introducing blockchain technology into its transfer-agency operations, which maintain ownership and transaction records for investment funds.
The bank services approximately $8.6 trillion through this business and safeguards more than $59 trillion in assets across its wider operations. Moving even part of that infrastructure towards distributed records represents a substantial institutional use of blockchain.
According to FinTech Magazine, BNY believes on-chain fund records could transform how financial-market infrastructure processes and verifies ownership.
A transfer agent maintains the official register showing who owns shares in a fund. It also supports subscriptions, redemptions, transfers and communications with investors. These functions are essential, but they often depend on separate systems operated by asset managers, administrators, custodians and distributors.
Blockchain can provide a synchronised record that authorised participants access without maintaining numerous independent copies. This could reduce reconciliation, shorten processing times and make changes in ownership visible more quickly.
BNY is not immediately eliminating its traditional infrastructure. The bank is adding digital transfer-agency capabilities capable of supporting digitally native funds while maintaining established systems.
That parallel approach is sensible because regulated funds cannot switch their complete operating model at once. Existing products, customers and legal records must continue to function while the new system is tested.
BNY has already demonstrated a US Treasury transaction outside conventional settlement hours. The experiment illustrates one of the principal attractions of tokenised markets: assets and collateral could move when traditional systems are closed.
Around-the-clock availability will create value only if the surrounding infrastructure evolves with it. Investors need access to compatible payment assets, custodians must support digital ownership and compliance processes must operate beyond normal business hours.
The technology must also preserve legal certainty. An on-chain record needs to correspond with an enforceable ownership claim, particularly during insolvency, an operational error or a dispute between systems.
BNY’s approach demonstrates why institutional blockchain adoption is often gradual. The immediate objective is not to replace every existing database. It is to create a digital record that improves selected parts of a heavily regulated process without sacrificing continuity.
Noxcat presents its vision for the Web3 wallet
Noxcat used Malaysia Blockchain Week to present its vision for a wallet that acts as a broader gateway to Web3 services.
The non-custodial mobile wallet is being developed by XWHALE Technology. According to the company announcement distributed through TradingView, Noxcat sees wallets evolving beyond the storage and transfer of digital assets.
Modern Web3 wallets can connect users with payments, token exchanges, decentralised applications, identity services and on-chain investment products. This makes the wallet one of the most strategically valuable positions in the blockchain ecosystem.
A user may interact with several networks and applications while maintaining one wallet relationship. The provider controlling that interface can consequently influence which services are discovered, which transactions appear trustworthy and how risks are communicated.
The opportunity is also the source of the wallet sector’s greatest difficulty.
Non-custodial products allow users to retain control over their private keys, reducing dependence on a central custodian. However, the user may bear the complete consequence of losing a recovery phrase, approving a malicious transaction or interacting with a fraudulent application.
Improving usability must not disguise those risks. A wallet interface should explain what a transaction will do before the user signs it. Permissions should be understandable and revocable, while suspicious contracts and addresses should produce prominent warnings.
Future wallets will need to solve several problems simultaneously:
- Recovery should be possible without creating an easy route for attackers.
- Multi-chain support should not expose users to unsafe bridges.
- Transactions need plain-language explanations.
- Applications should be assessed without pretending that every listed service is endorsed.
- Identity and compliance functions must preserve appropriate privacy.
- Users should be able to export their assets and move to another wallet.
Account abstraction, social recovery and passkey-based authentication can reduce dependence on seed phrases, but each introduces new technical and governance trade-offs.
Noxcat’s presentation reflects the wallet market’s transition from a specialist crypto product to a potential financial and identity interface. The companies that succeed will be those that make self-custody safer without quietly recreating the restrictions of a centralised account.
Thailand uses a zero-tax window to attract regulated crypto capital
Thailand has introduced a temporary personal-income-tax exemption for qualifying gains from cryptocurrency and other digital-asset transactions.
The measure applies through the end of 2029, but only when eligible transactions are completed through digital-asset exchanges, brokers or dealers licensed in Thailand.
As Crypto.news reports, the policy is intended to attract investment and strengthen Thailand’s position as a regional digital-finance centre.
The licence condition is central to the strategy.
Thailand is not simply removing tax from crypto activity wherever it takes place. It is using the exemption to encourage investors to trade through locally supervised businesses. This can increase domestic liquidity while bringing more transactions within anti-money-laundering, reporting and consumer-protection frameworks.
The approach turns tax policy into a market-structure tool. Investors receive a financial incentive, licensed platforms gain volume and regulators gain greater visibility over activity that might otherwise move offshore.
Thailand’s potential advantage extends beyond individual traders. A more active regulated market can attract exchanges, custodians, blockchain developers, professional advisers and institutional-service providers.
However, tax incentives do not guarantee sustainable industry development.
Capital attracted primarily by temporary exemptions may leave when the benefit expires or another jurisdiction offers more favourable terms. Thailand will also need reliable licensing, access to banking services, cybersecurity standards and consistent treatment of digital businesses.
The exemption’s boundaries must remain clear. Capital gains from eligible trading may receive favourable treatment, while income from activities such as mining, staking, employment or commercial services may be taxed differently.
Investors should therefore avoid interpreting “zero crypto tax” as a universal exemption covering every digital-asset transaction.
Thailand’s policy nevertheless sends a strong signal. It recognises that crypto activity can be encouraged while being directed towards regulated domestic infrastructure.
Germany considers ending its one-year crypto tax exemption
Germany is considering abolishing the rule that allows private investors to sell cryptocurrency without capital-gains tax after holding it for more than one year.
Under the existing treatment in Section 23 of the German Income Tax Act, digital assets held in private ownership can generally be sold tax-free after the minimum holding period. This gives cryptocurrencies different treatment from conventional securities subject to investment taxation.
According to CoinMarketCap Academy, policymakers are examining a reform that could replace the exemption with taxation regardless of how long an asset has been held.
The proposal is politically contentious and should not be confused with an already implemented change. Germany’s current one-year rule remains relevant while the reform proceeds through the political and legislative process.
Supporters of abolition argue that cryptocurrency should not receive more favourable treatment than shares or other financial investments. A consistent tax system could also generate additional revenue and reduce incentives created solely by asset classification.
Opponents believe the change would penalise long-term holders and weaken Germany’s position as a blockchain and digital-asset centre. A petition defending the existing rule has reached the threshold required for consideration by the Bundestag’s Petitions Committee.
The debate reveals how strongly tax treatment can shape market behaviour.
The current exemption encourages investors to hold assets for more than one year instead of trading frequently. Removing it could increase the importance of tax reporting and discourage some retail participation, but it might also eliminate strategies designed primarily around the holding deadline.
Implementation would require answers to practical questions:
- Would the change apply only to future purchases?
- How would historic acquisition costs be documented?
- Would a flat withholding tax replace individual income-tax treatment?
- How would staking, lending and decentralised-finance transactions be classified?
- Would exchanges be required to report customer activity automatically?
Germany’s discussion contrasts directly with Thailand’s policy. One country is considering reducing a long-standing benefit, while the other is introducing a time-limited exemption to attract regulated activity.
The comparison demonstrates that there is no international consensus on how crypto should fit within taxation. Governments are balancing revenue, fairness, investor protection and competition for digital businesses in different ways.
BlackRock, Visa and Mastercard join Circle’s Arc validator group
Circle has named a group of major financial institutions as founding validators for Arc, its blockchain designed for stablecoin payments, tokenised assets and institutional settlement.
The cohort includes BlackRock, the Depository Trust & Clearing Corporation, Galaxy, Global Payments, Intercontinental Exchange, Mastercard, MoneyGram, SBI Group, Standard Chartered, Sumitomo Corporation and Visa.
According to MarketScreener, the participation of these companies gives Arc substantial institutional backing before its public mainnet launch.
Arc is scheduled to open publicly on 16 September 2026. The network has been operating privately with more than 100 institutional and ecosystem participants, while its testnet has reportedly processed hundreds of millions of transactions.
USDC will be used to pay network fees, connecting Arc’s operation directly with Circle’s stablecoin business. The design is intended to make transaction costs more predictable for payment and financial applications.
BlackRock plans to deploy its BUIDL tokenised money-market fund through Arc’s USDC infrastructure. DTCC is also working towards connections involving tokenised securities held within established market systems.
These integrations suggest that Circle wants Arc to become more than a network for transferring stablecoins. It is positioning the blockchain as an operating layer connecting payments, investment products, foreign exchange, custody and settlement.
The validator structure will attract scrutiny.
A group dominated by recognisable financial institutions may provide operational reliability, compliance expertise and confidence for enterprise users. It also creates a more permissioned model than blockchains secured by a large and open community of independent validators.
That trade-off may be deliberate. Institutional markets often require identified operators, contractual accountability and predictable governance. The resulting network can still use blockchain architecture without pursuing maximum decentralisation.
Users and developers should nevertheless understand who can join the validator set, how upgrades are approved, whether transactions can be censored and what happens when participating institutions disagree.
Circle’s position at the centre of the network also creates potential conflicts. The company issues the gas asset, operates validator infrastructure and benefits from expanding USDC usage.
Transparent governance will be essential if Arc is to become shared financial infrastructure rather than a proprietary ecosystem with external participants.
The validator announcement is one of the clearest signals that traditional financial companies are progressing from testing blockchain applications to participating directly in network operation.
HIPTHER previously examined this institutional transition in its Blocks & Headlines edition covering regulated settlement, productive digital assets and blockchain infrastructure.
The bigger picture: blockchain is becoming regulated financial architecture
These five developments show blockchain adoption entering a more structured phase.
BNY is applying distributed records to the ownership infrastructure supporting trillions of dollars in funds. Circle is assembling banks, payment networks, market utilities and asset managers around a purpose-built settlement network.
At the same time, consumer access still depends on wallets that can translate complicated transactions into safe and understandable actions. Without better interfaces, institutional infrastructure may advance while ordinary users remain exposed to avoidable mistakes.
Tax policy adds another dimension. Thailand is using an exemption to direct capital towards licensed domestic platforms, while Germany is debating whether favourable treatment for long-term holders remains justified.
The market is consequently being shaped by three forms of infrastructure:
- Technical infrastructure determines how assets and records move.
- Regulatory infrastructure determines which institutions can participate.
- User infrastructure determines whether people can interact safely with the system.
Blockchain’s next phase will not be defined by one network or jurisdiction. It will be determined by how effectively these three layers work together.
